Tesla (TSLA) - Get Report traded higher on Monday after the electric carmaker received another upgrade, this time from Wedbush Securities’ Daniel Ives, who lifted his one-year price target to $560 from $500 and said his new bull case is $1,000, up from $800.
In a research note to clients, Ives said Tesla was likely to achieve its goal of 1 million deliveries by 2023 or possibly sooner. The influential analyst also said that with Tesla’s sustained path to profitability and S&P 500 index inclusion achieved, “the Tesla bull story is now all about a stepped up EV demand trajectory into 2021.
“Overall we are seeing a major inflection of EV demand globally with our expectations that EV vehicles ramp from ~3% of total auto sales today to 10% by 2025,” he said, noting that Tesla has seen “Teflon-like demand” for its flagship Model 3's in Europe and China” throughout the Covid-19 pandemic.
Ives’ accolades follow Standard & Poor’s announcement last week that the electric carmaker will join the S&P 500 on Dec. 21, a move that had been anticipated for months as Tesla has surprised Wall Street with better-than-expected earnings and sales, which in turn has driven its valuation to new heights.
The move prompted several Wall Street analysts to re-evaluate their longer-term expectations of Tesla, including Morgan Stanley analyst Adam Jones, who raised Tesla to overweight for the first time in more than three years last week.
Like Jones, Ives also pointed to software-driven upgrades, which he said have gone “right to the bottom-line and enabled Tesla to get out of the red ink.”
Combined with cost cuts and tax credit boosts as well as still-lagging competition from the likes of Rivian and Fisker (FSR) - Get Report as well as GM (GM) - Get Report and Ford (F) - Get Report, Ives believes Tesla is still in pole position in the race to mass-produce EVs.
“Competitively speaking, we still believe at this point every auto maker is chasing after Tesla which remains the clear leader in the EV world as the company's production capabilities, battery technology/innovation, and brand awareness is unrivaled in our opinion,” Ives said.
Tesla Daily's Rob Maurer in his daily roundup of Tesla news reported that Goldman Sachs expects surging demand for Tesla stock ahead of its S&P 500 index inclusion, that the Model Y may be getting a range boost, and that the Fremont, California, police department has completed an analysis of a Tesla as a police patrol car.
Shares of Tesla were up 4.85% at $513.36 in trading on Monday.