Shares of Tesla (TSLA 2.35%) 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.
Image source: Tesla.
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.
