The Nasdaq Composite (^IXIC 1.78%) found itself in an unusual situation on Wednesday morning. Throughout 2020, the Nasdaq had the leadership role for the stock market, dramatically outpacing other major benchmarks. However, even as other indexes posted huge moves higher on Wednesday, the Nasdaq had to settle for just a small gain as of midday.
In fact, among the top Nasdaq stocks, only Tesla (TSLA 2.97%) managed to make it into the green. However, that doesn't mean that companies aren't clamoring to become part of the Nasdaq phenomenon, as Petco indicated its intent to list its shares on the exchange and set anticipated terms for its coming IPO.
Tesla gets another boost
Shares of Tesla were higher by nearly 5% on Wednesday, setting another all-time record. The electric-vehicle maker has a loyal following, and Wall Street stock analysts have come around to the virtues of the share price's unrelenting ascent.
Image source: Tesla.
The most recent comments came from Morgan Stanley, which released its latest look at Tesla on Tuesday afternoon after the market closed. Morgan Stanley boosted its price target on Tesla by 50%, weighing in with a new target of $810 per share. Analysts kept their bullish overweight rating on the automaker stock.
Morgan Stanley made it clear that it still believes that Tesla shares have an extremely high valuation. But the Wall Street giant admitted that there are good reasons for that premium, pointing to the automaker's latest delivery and production figures and anticipating further growth in the years to come. In particular, Morgan Stanley now believes that Tesla will be able to manufacture 5.2 million vehicles a year by 2030, up from its previous forecast of 3.8 million vehicles. That kind of long-term growth can justify a high price.
Moreover, Tesla has proven that shareholders are willing to support the automaker with capital as necessary. The EV specialist's recent secondary stock offering showed that Tesla shouldn't have to worry about defaulting on debt ever again -- and provided it with the cash it needs to spur accelerating growth. That's good news for shareholders, and it explains why Tesla's stock can keep climbing even as Nasdaq investors take profits on other high-growth companies to begin the new year.
A big bark, but will Petco bite?
Meanwhile, shares of privately held Petco Health and Wellness aren't yet available for trading. But that's set to change in the near future, as the pet products retailer aims to come public.
Petco updated its registration filing with the U.S. Securities and Exchange Commission to give details on its upcoming initial public offering. The company said that it anticipates selling 48 million shares, with an expected range of $14 to $17 per share. Petco has chosen the Nasdaq for its listing, having obtained the ticker symbol WOOF.
The pet food industry has been extremely popular lately. The COVID-19 pandemic has forced many people to stay at home for long periods of time, and that prompted many people to get pets or focus more on the pets they already owned. That's been a boon throughout the industry, lifting shares of companies like Chewy (CHWY 4.28%) and PetMed Express (PETS 2.41%).
Petco emerges onto the scene at a healthy time for IPOs. The company's private equity investors hope that the reception from investors proves to be just as strong as the performance of other recent offerings.
