Tesla Inc.’s shares climbed toward the all-time high on Thursday, driven by an update and expects a “blue” Senate to be a “potential game changer” for Vale’s electric car maker Silicon and other EV and alternative energy companies.
Tesla TSLA,
The shares traded for up to $ 811.61, an intraday high, extending its winning streak to the 10th session, the longest since a 10-day extension in April.
Analysts at RBC Capital, led by Joseph Spak, raised their Tesla stock rating to the equivalent of insuring, selling, and set a target price of $ 700, compared to $ 339 earlier.
See too: Tesla and other EV manufacturers report record sales, pushing inventories to new highs
“There is no elegant way to put it other than to say that we have completely missed (Tesla’s) shares (even though our fundamental view so far was not too far away),” they said in a note on Thursday. “But in the spirit of New Year’s resolutions and in light of our recent EV forecast until the 2050 report, we reevaluated (Tesla’s) place in the industry, growth opportunity and cheap access to capital.”
Of the 37 analysts surveyed by FactSet, 12 classify Tesla’s shares as a purchase, 14 class as a retainer and 11 as a sale, with an average target price of $ 455.71, implying a disadvantage of more than 40%.
“Our biggest flaw was how (Tesla) can take advantage of its share price to raise capital cheaply and finance capacity and growth expenses,” said RBC analysts. Traditional automakers “need to generate significant money from existing operations to finance their transition to electrification,” and Tesla can also use its share price to finance acquisitions, they said.
“Even a relatively large deal would be insignificant for (Tesla’s) market capitalization … To sum up, the higher share price is somewhat self-fulfilling for (Tesla’s) growth potential,” analysts said.
The boost for Tesla’s shares came amid sharp gains for shares in other EV-and EV-related companies and alternative energy stocks in recent sessions, as investors bet that a Democrat-controlled Senate will prioritize clean energy policies.
Related: GM sales fell for the year, but returned to pre-pandemic levels in the fourth quarter
IShares Global Clean Energy ETF ICLN has gained almost 20% this week and 190% in the last 12 months. American deposit receipts from Nio Inc. NIO, an EV manufacturer based in China, increased by almost 11% in the week and more than 1,500% in the last 12 months. In comparison, the S&P 500 SPX index,
gained 1.3% this week and about 18% in the last 12 months.
“A Blue Senate is very optimistic and a potential ‘game changer’ for Tesla and the EV industry in general, with a more green agenda now certainly in the coming years,” said Dan Ives, an analyst at Wedbush, in note on Thursday.
“We believe that a reduction in EV tax credits and more consumer incentives and government initiatives around the EV sector will be on the horizon, which is a big plus” for Tesla and also for General Motors Co. GM,
Rivian, Fisker Inc. FSR, privately owned,
and other EV-related companies, he said.
Tesla was added to the S&P 500 index on December 21. The stock fell in that session and the next, but has been on a bullish trajectory ever since. The shares have gained more than 750% in the last 12 months, compared to gains of about 18% for S&P.