Tesla stock could surge 51% to $1,000 according to this analyst

Is he right?

| More on:
blue car on the road with mountains and green grass in the background

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shares of Tesla (NASDAQ: TSLA) have soared nearly 615% over the past 12 months but will surge to new all-time highs in the coming year.

So says Wedbush analyst Daniel Ives. On Monday, Ives upgraded Tesla to outperform (buy) and raised his price target on the stock from $950 to $1,000. His new base target represents potential gains for investors of roughly 51% over the stock's closing price on Friday of roughly $661. The bull case is even more compelling, suggesting the stock could nearly double to $1,300. 

Ives cited Tesla's recently released first-quarter delivery numbers, which soared 109% year over year to 184,800. This came despite a global semi-conductor chip shortage that forced the closure of Tesla's Fremont factory for two weeks in late February. Ives said the production numbers amounted to a "paradigm changer," suggesting the results are part of a "global green tidal wave under way."

The analyst also expects Congress to ultimately remove the ceiling of 200,000 units per manufacturer on cars eligible for the electric vehicle (EV) tax credit, while also increasing the credit to $10,000 per vehicle. This would act as a catalyst to increase demand for EVs in the U.S.

"We now believe Tesla could exceed 850k deliveries for the year with 900k a stretch goal, despite the chip shortage and various supply chain issues lingering across the auto sector." Ives wrote in a note to clients. 

Will Tesla's stock price hit $1,000?

It's hard to dismiss Tesla's ability to ramp up production. Tesla started out 2020 saying it expected to deliver 500,000 vehicles for the year, a number many thought was pie-in-the-sky. The company delivered 499,550, just 50 vehicles short of Musk's audacious goal. 

That said, Tesla already has a significant amount of growth baked into its share price. The stocks valuation clocks in at a lofty 23, when a reasonable price-to-sales ratio is typically between 1 and 2. However, given Tesla's recent pullback and its accelerating production capability, the price target doesn't seem that far-fetched.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Danny Vena owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy. Th Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

electric vehicle such as Tesla being charged at charging station
International Stock News

Why did the Tesla share price just tumble 7%?

Nasdaq investors just sent the Tesla share price sharply lower.

Read more »

A woman is excited as she reads the latest rumour on her phone.
Broker Notes

Goldman Sachs says this US stock is replacing Tesla in the Magnificent Seven

And no, it's not a tech company. It's in the healthcare sector.

Read more »

A man looking at his laptop and thinking.
Share Gainers

Should I buy Nvidia stock as an Australian investor?

Many Aussies are thinking of jumping on the bandwagon, but they need to think about these issues first.

Read more »

Digital rocket on a laptop.
Broker Notes

Is the Nvidia share price on course to reach US$1,400?

You betcha, says one analyst.

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Could Nvidia become the most valuable stock on earth?

Can anything stop the Nvidia stock price?

Read more »

A group of young ASX investors sitting around a laptop with an older lady standing behind them explaining how investing works.
International Stock News

What can ASX investors learn from Warren Buffett's latest buys and sells?

We've just found out what Buffett's been buying and selling recently.

Read more »

electric vehicle such as Tesla being charged at charging station
International Stock News

Why Tesla stock tanked in January

Will the electric vehicle leader see earnings decline once again in 2024?

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
International Stock News

Will Nvidia stock be worth more than Microsoft by 2030?

The graphics giant has been growing at a much faster pace than Microsoft, but can it sustain that momentum?

Read more »