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Tesla Shares Climb Past $500 After Oppenheimer Boosts Price Target

Tesla shares passed the $500 mark for the first time Monday as analysts re-set price targets for the clean-energy carmaker amid its near 100% gain over the past six months.

Tesla Inc.  (TSLA) - Get Tesla Inc Report shares pushed passed the $500 mark for the first time ever Monday after analysts at Oppenheimer boosted their price target on the clean-energy carmaker to a Wall Street high of $612 per share and called for its inclusion in U.S. equity benchmarks. 

Oppenheimer's Colin Rusch nearly doubled his existing price target for Tesla, which he set in late October at $385 per share, to $612 per share in a client note that argues the group has reached "critical scale" to support sustainable free cash flows. He also suggests the Elon Musk-controlled company could pose and "existential threat" to transport companies that do not have the ambition or the ability to innovate at Tesla's torrid pace.

"We believe Tesla's powertrain technology, power/data architecture, and operating system are tracking ~three years ahead of competition based on available vehicles and checks on new platforms," Rusch said. "Given the resolution of manufacturing bottlenecks and demonstration of strong consumer demand, we believe TSLA is becoming a must-own stock and could benefit from inclusion in additional indexes."

Tesla shares rose $46.71, or 10%, to close at $524.86 Monday. The stock traded as high as $525.57 in the regular session, an all-time high that takes its six-month gain to just under 100%. The company's market capitalization is now $95 billion, about $8 billion more than General Motors  (GM) - Get General Motors Company Report and Ford  (F) - Get Ford Motor Company Report combined.

Last week, Tesla hit a then-all-time high of $498.80 each after founder and CEO Elon Musk officially launched Model Y SUV production at its Shanghai 'gigafactory' with a prediction that the SUV will be more popular than its other vehicles in the world's largest car market.

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Musk cut the ribbon on Tesla's $2 billion plant -- its first foreign production facility -- earlier Tuesday in a ceremony attended by Shanghai city officials and scores of company employees while noting that the Model Y, which carries a base price of 444,000 Chinese yuan ($63,000), will likely outsell Tesla's other sedans, including the Model 3.

China's car market, however, is suffering one of its sharpest pullbacks in more than three decades as broader economic growth slows amid its ongoing trade dispute with the United States.

Government subsidies for the sale of electric cars, meanwhile, were cut in half -- to 25,000 yuan -- in June of last year, triggering a plunge in third quarter sales that rattled investors and raised questions over China's ambition to have clean-energy vehicles comprise 70% of its sales by 2025.

Still, Tesla's main China rival, the electric carmaker NIO, posted a 25.4% increase in December sales earlier this week, suggesting the recent firming of China's broader economy could be supporting new car sales heading into 2020.

Earlier this month, Tesla topped the lower end of Wall Street forecasts for 2019 deliveries with a full-year tally of 367,500 units, lead by the sale of 92,500 Model 3s over the three months ending in December.