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Why Tesla Stock (and Hertz stock) Is Jumping Higher on Monday

By Daniel Sparks – Oct 25, 2021 at 10:41AM

Key Points

  • Hertz is ordering 100,000 Tesla vehicles.
  • One analyst thinks Tesla stock is headed to $1,200.
  • The electric car maker flexed its pricing power over the weekend with a price increase.

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Three things are sending Tesla stock to new all-time highs on Monday.

What happened

Shares of electric car maker Tesla (TSLA 11.00%) jumped on Monday. The stock rose as much as 6.7%, putting the shares at all-time highs. As of 10:15 a.m. EDT, shares are up 4.5%.

The growth stock's gain is likely fueled by several things: price increases over the weekend for its flagship Model S and X vehicles, an analyst's move to hike his price target for the stock, and a big order of Tesla vehicles from rental car company Hertz (HTZG.Q).

Vehicle production at Tesla's factory in California.

Vehicle production at Tesla's factory in California. Image source: The Motley Fool.

So what

"As consumer interest in electric vehicles (EV) skyrockets, Hertz today is announcing a significant investment to offer the largest EV rental fleet in North America and one of the largest in the world," Hertz said in a press release Monday morning. The company's initial order for electric vehicles includes "100,000 Teslas by the end of 2022," Hertz said.

Hertz shares soared on the news. The stock is up more than 9% as of this writing.

Meanwhile, Morgan Stanley analyst Adam Jonas increased his 12-month price target on Tesla shares from $900 to $1,200. His bullishness stems from a view that the company may achieve significant manufacturing achievements over the next 12 months in terms of both volume and costs.

Finally, Tesla's move over the weekend to increase the price of the long-range versions of its Model S and X vehicles by $5,000 each highlight the company's pricing power.

Now what

Tesla recently reported strong third-quarter results. There could be more analyst upgrades ahead as investors digest the company's impressive performance.

In its third-quarter shareholder letter, Tesla said it still expects to grow its deliveries by more than 50% this year despite a difficult global operating environment.

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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