Even with the price increase in the run-up to the inclusion in the S&P 500 at the end of December, Tesla has become one of the most valuable companies in the world – and the upward trend will continue in the new year, albeit with a small damper on Thursday, which is probably due to the news was that 158,000 older Model S and Model X were threatened with a recall. After a drop of 1.1 percent to $ 845 per share, the Tesla stock market value at the close of trading was a little more than $ 800 billion, a good eight times as much as a year ago. And as a well-rated analyst said this week, he sees not only the trillion within reach for Tesla, but much more.
“Tesla is still underrated”
With his 12-month Tesla target raised to $ 715 at the end of December, Dan Ives of Wedbush Securities is one of the more optimistic analysts on Wall Street – and like most others is still below the current price. But a month before that he had also given a price target for the “bull case” at Tesla, that is, a positive scenario: $ 1,000, which would correspond to a total capitalization of around $ 950 billion.
Ives has now confirmed this higher goal in an interview with private customer broker TD Ameritrade and went even further. Both Tesla’s growth and profitability are still underestimated, he said. And for both things now look even better with the change of president in the USA including the majority in the Senate: The discussion is about doubling the tax credit for the purchase of electric cars. It is currently $ 7,500, but no longer applies to Tesla because it begins to expire when the first 200,000 sales are reached. That could change under Biden, said Ives.
As a result, Tesla will possibly deliver between 10 and 20 percent more electric cars in 2022 than is currently expected, the analyst said, and this could lead to a re-rating on the stock market. In a year or two, he therefore not only sees a market value of $ 1 trillion for Tesla: “In a few years this could be a company that could approach 1.5 trillion to 2 trillion.” In general, Tesla is not an automaker, but to be viewed as a “disruptive technology company”. In addition to the auto business, own batteries, the energy business and solar would be added, and other investors would increasingly see it that way.
According to Tipranks’ financial service, Ives is not only one of the most optimistic stock market observers with regard to Tesla, but also one of the most accurate overall. His success rate is given as 76 percent and the average return on his recommendations is 34.5 percent. This puts him in 33rd place among 7227 professional analysts.
Update: Ives has raised his forecast for Tesla in line with his even more positive assessment: Over a 12-month horizon, he is now predicting $ 950 as a medium target, reports StreetInsider. In the positive case, he sees the Tesla share rise to $ 1,250.