Maybe not.
If it keeps pace with the first week’s increase, Tesla’s shares will match all of last year’s earnings in mid-March. Not that anyone is predicting another 700% increase in shares this year. Or even a tenth of that.
In fact, even some of the most optimistic analysts are only predicting that Tesla’s shares would reach $ 1,000 by the end of the year, an increase of about 14% for the rest of 2021 compared to Friday’s record closing.
Several analysts with relatively positive outlook for the company have 12-month price targets well below Friday’s $ 880 close. The current average target price for analysts is $ 440, which would represent a 50% drop in shares.
Of the 35 analysts who follow the action, 13 have a “buy strong” or “buy” recommendation and the other 11 have a neutral or wait recommendation. Of the remainder, seven have a sales recommendation and only four have a “strong sale”.
Morgan Stanley’s Adam Jonas is one of the optimistic analysts with a low price target. Considered one of the best car analysts on Wall Street, Jonas raised his Tesla recommendation to “overweight” in late November, but struggled to keep raising his target price ahead of the market price.
On November 18, when he raised the stock, he set a target price of $ 540, which was a 22% increase over the stock’s value at that time. Last Wednesday, it increased to $ 810, only to see Tesla’s shares quickly surpass that mark as well.
Instead, they are betting on Tesla’s ability to continue to grow rapidly and to capture a large part of the world’s growing appetite for electric vehicles, or EVs. There are predictions that within 10 to 20 years, Tesla could become the number one automaker in the world, not just electric cars, but any type of car.
Dan Ives, a technology analyst at Wedbush Securities, has a basic scenario target price of $ 715 for Tesla shares and an upward target price of $ 1,000. His recommendation to buy Tesla is based on his belief that Tesla will continue its strong run.
“I think they can reach 1 million vehicles [delivered annually] in 2022. And looking north at 3 to 4 million as we enter 2025-26, with 40% of that growth coming from China, “he said.” We believe that if you look at the next 10-15 years, you could start looking at 10-12 million vehicles a year, “he said. Volkswagen, the current world leader, sold 11 million cars in 2019.
This is all conjecture, of course. But what is indisputable is that Tesla’s actions proved that analysts were consistently wrong during the race that started 15 months ago.
It was an increase that analysts never predicted. The average target price in October 2019 was just $ 50 at the time, adjusted for the division. The 12-month target price a year ago was $ 62.
From here, Ives points to some of the most successful technology stocks in the world and says that Tesla is now at the same point that companies have been at decisive moments in their stories.