Tesla Gets Another Price Target Hike From a Top Analyst

Shares of Tesla have rallied over 200% this year and watching the electric vehicle maker’s rally has been nothing short of amazing.

Another analyst is jumping on the bandwagon when it comes to optimism over the company’s future and has increased his price target on shares.

Credit Suisse analyst Dan Levy has raised his price target on shares of Tesla to $1,400, or twice the $700 target he’d given previously. He kept his “neutral” rating on the stock.

Tesla hit a record high of $1,794.99 on July 13.

“The stock seems priced for perfection, and any material hiccup could drive a correction,” Levy wrote in a note last week.

“Tesla is now the world’s most valuable automaker even though it will only sell ~450-500k units this year (<1% global volume,” Levy said. “To justify the current stock price, we believe one must assume that by 2025 Tesla will set 2.2mn units (making it as large as German luxury brands, while trading at an elevated 30x+ PE [price/earnings] multiple.” “It tells us that the onus is now on Tesla to execute to these lofty expectations; albeit, an elevated stock price provides Tesla with a significant cost-of-capital advantage.” According to the analyst, Tesla’s recent run-up in share price is connected to the better than expected second-quarter delivery results, announcements on capacity expansion, mass short covering, momentum buying and heightened retail interest. Over 83,000 Robinhood accounts added Tesla to their portfolios in the last week, according to data from Robintrack. Levy expects Tesla “to continue garnering attention with a number of positive catalysts ahead.” This includes second quarter earnings results this week and the company's inaugural Battery Day September. WedBush analyst Dan Ives said in a note recently that it would will likely include a Tesla announcement for “‘game changing’ battery developments. Further expansion on auto-making capacity will also be a key catalyst to watch for Tesla, said Levy. The capacity “point is crucial, as over the next 18 months Tesla capacity may nearly double for its current level (currently 700k, going to 1.3mn units),” he said. “It potentially implies upside to 2022 volume estimates (we forecast ~970k).” Disclaimer: We have no position in Tesla Inc. (NASDAQ: TSLA) and have not been compensated for this article.