The electric carmaker on Friday received a big price-target boost from analysts at Credit Suisse, who doubled their one-year outlook for the stock to $1,400 from $700, though cautioned that Tesla shares at current levels are “priced to perfection.”
In a note to clients, Credit Suisse analysts Dan Levy and AJ Denham said they see “multiple factors responsible for the recent sharp run-up in Tesla stock,” including “EV euphoria” as well as short-sale covering and buying by quant/momentum investors.
Positives including Tesla’s so-called Battery Day, when the company will reveal a long-lasting battery, and second-quarter earnings that may show a profit, are reasons to expect the stock to double over the next 12 months, Levy and Denham wrote.
However, with the stock "priced for perfection, we believe any material near-term negative datapoint could lead to a drawdown,” Levy and Denham cautioned.
Tesla shares have already gained more than 250% year to date on expectations that the carmaker will not only continue to hold pole position in the electric vehicle market but will streamline its operations and produce more profits.
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