Tesla stock rose 13.5% on Monday after raising its target price to $1500 an analyst for JMP Securities. Investors expect the publication of the fourth consecutive quarter with a profit at the end of the month. However, the average estimates of wall Street indicate that the current price of Tesla stock is overvalued.
With the incredible growth of the stock in the last three months, Tesla (TSLA) has become the most valuable automaker in the world. Market capitalization of the company Elon musk is $235,5 billion, while the three largest U.S. automakers – General Motors (GM), Ford (F) and Fiat Chrysler (FAUC) – cost about $70 billion.
Over the last 5 trading day Tesla’s shares jumped more than 40%, and on Monday closed with a growth of 13.48%.
Last week Tesla reported deliveries 90 650 electric vehicles for the three months ended 30 June (for the second fin. quarter), significantly ahead of the rate wall street, constituting 72 000 vehicles.
The high result was achieved despite the temporary closure of the main plant in Fremont and General adverse conditions of a pandemic. In addition, indicators of Tesla stood out amid a sharp drop in sales in the broad market of the automotive industry. GM, Fiat Chrysler and Toyota Motor, and Ford for the same period reported a fall in the supply of more than 30%.
The news gave a strong signal to potential for Tesla’s profit for the fourth consecutive quarter, detailed financial indicators, investors will know about July 22.
On Friday, Wedbush analyst Dan Ives raised its target price on Tesla stock from $1250 to $2000 (the highest among analysts on wall Street). The analyst wrote that he believes that the demand for Model 3 is growing more than expected in the future will contribute to sales in China in the summer, as well as the weakening of quarantine measures in the U.S. and Europe. Additionally, the future Tesla Battery Day event, with demonstration of some potentially “game-changing” developments of batteries will be “another key catalyst for shares of Tesla”.
“While the stock is rising, we believe the fundamental catalyst remains the huge Chinese market, which shows clear signs of sharp increase in demand for Musk & Co. in the rest of this year,” wrote Ives.
According to the analyst, Tesla could reach 450,000 supply of electric vehicles for the year.
On Monday, JMP Securities analyst Joseph OSHA has increased its target price for Tesla stock from $1050 to $1500.
“We believe that the question to be considered is not dear whether the action on the current evaluative measures, and that growth and competitive position of the company indicate the potential of the stock over the next few years,” wrote Joseph OSHA, predicting that annual sales of Tesla could reach $100 billion by 2025.
Other analysts also raised their estimates after the strong performance of Tesla in the second quarter, but these estimates are significantly below the current price. JPMorgan, which assesses the rating of Tesla stock “Underperform” (rating worse, overall, than neutral, but better than “to sell”), increased its target price from $275 to $295, while Deutsche Bank raised its target from $900 to $1000.
Thus, average estimates of wall Street (among 32 analysts) of Tesla stock as follows: 12 have equivalent rating of “sell”, 11 – “keep” and 9 “buy.” The average price target is $775, which is 77% below the closing price on Monday of $1371,58.
Tesla’s shares increased by almost 490% over the last year and many analysts believe that the current situation is very unstable. Analyst Ryan Brinkman from JPMorgan, whose trust rating of Tesla stock at $295 is the lowest among analysts, believes that investors ‘ expectations about the future success of the automaker overstated.
Shares of other manufacturers of electric cars have also increased in recent months. Chinese competitor Tesla company NIO Inc. (NIO) have demonstrated the growth of the stock of 380% over the last quarter, jumped 22.7% on Monday following upbeat June sales report.
Shares of the American manufacturer of electric vehicles Workhorse Group Inc. (WKHS), although it fell by 15.78 percent on Monday, for the month showed an increase of 443,5% to a record rise of over 11 victory of the day.
Stock beginner market, the company Nikola Corp. (NKLA) also fell by 14.46% on Monday, but almost 390% higher than the price at the beginning of the year.
