- Tesla shares have “room to run further ” due to strong Model 3 demand in China and upcoming “Battery Day” reveals, Wedbush Securities analyst Dan Ives wrote Tuesday.
- The analyst boosted his base-case price target to $US1,000 per share from $US800. His bull-case target jumped to $US1,500 from $US1,350.
- Tesla breached the $US1,000 level on Wednesday to hit a new record.
- Model 3 sales in China remain “a ray of shining light” amid coronavirus risks, Ives said, adding he expects the Shanghai Gigafactory to reach 100,000 deliveries in its first year of operation.
- Looking further ahead, Ives expects Elon Musk’s automaker to reveal a million-mile battery and extend its lead over other electric-car manufacturers.
- Watch Tesla trade live here.
Tesla stock soared to a fresh record on Wednesday, and Wedbush Securities analyst Dan Ives said he thinks it still has “room to run further.”
The analyst lifted his price target to $US1,000 from $US800 on Tuesday and boosted his bull-case target to $US1,500 from $US1,350. Ives hinges $US300 of his new base-case valuation on Tesla’s China operations alone, praising its fast rollout and surging demand in the country. Model 3 sales remain “a ray of shining light in a dark global macro,” he said, adding Tesla’s Shanghai Gigafactory should reach 100,000 deliveries in its first year of operation.
“While the stock has been roaring higher, we believe the main fundamental catalyst continues to be the massive China market which is showing clear signs of a spike in demand for Musk & Co. heading into the rest of this year,” Ives wrote.
As Tesla’s rapid expansion in China drove much of the analyst’s present-day target, Ives pointed to the company’s upcoming “Battery Day” as the next catalyst to push shares higher. The event is slated to reveal new “game-changing” battery technologies, including a cell that could last for one million miles. In an environment where legacy automakers are quickly closing in on Tesla’s electric-car lead, such a battery would set Elon Musk’s company further ahead and help Tesla better compete with traditionally powered cars, Ives said.
The announcement could also reduce battery production costs closer to the key $US100-per-kilowatt-hour level. Reaching the threshold would “give Tesla much more financial flexibility around pricing its current and future EV models” in line with gas-powered rivals, Ives added.
The battery event is expected to take place in June, though no official date has been announced.
Wedbush maintains a “neutral” rating on the electric-car company. Tesla traded at $US1,003.09 per share as of 9:42 a.m. ET Wednesday, up 140% year-to-date.
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