Jefferies analyst Philippe Houchois raised the firm’s price target on Tesla to $2,500 from $1,200 and keeps a Buy rating on the shares after he raised his 2020 EBIT estimate by 50% following the company’s recent Q2 report. The analyst, who assumes Tesla will set new benchmarks and ambitions for battery density, materials and industrial processes at its upcoming “battery day” meeting, said he still sees “logic in the valuation exuberance” surrounding Tesla, adding that in his view the “valuation problem lies with Legacy automakers, not Tesla.” His price target equates to a $500 post-split valuation, Houchois noted.
Wedbush raised the price target of TSLA stock to $3,500.
The production and demand trajectory in China for Tesla “remains robust and stronger than expected” for Q3 with “clear momentum” heading into year end, Wedbush analyst Daniel Ives tells investors in a research note. The pent-up demand in the China electric vehicle market for Model 3’s and recent price cuts are creating a “perfect storm of demand” for the company, contends the analyst. Ives believes Model 3 demand out of China appears to be on a run rate to hit 150,000 unit deliveries in the “first year out of the gates” for the Giga 3 factory. He estimates the China growth story is worth “at least” $400 per share in a bull case to Tesla. With the China growth story, Tesla could now have $35 of earnings per share power by 2025/2026, versus a prior estimate of $20-$25, says Ives. As a result, the analyst increased his “bull case target” for Tesla shares to $3,500 from $2,500. Nonetheless, Ives keeps a Neutral rating on Tesla with a $1,900 price target.
Tesla’s CEO Elon Musk has suggested the carmaker may be able to mass-produce longer-life batteries with 50% more energy density in three to four years. “400 Wh/kg *with* high cycle life, produced in volume (not just a lab) is not far. Probably 3 to 4 years,” Musk tweeted on Monday ahead of its “Battery Day” event.
Jefferies boosted its price target on Tesla to a Street high of $2,500 a share — or $500 after Tesla’s planned stock split. Philippe Houchois, the analyst at Jefferies who made that call, joins “Squawk Box” by phone to discuss.