Cannacord analyst Jonathan Dorsheimer upgraded Tesla (ticker: TSLA) shares to Buy and increased his price target from $419 to $1,071. That represents a 124% boost to his previous target price.
Dorsheimer’s case is built around all of the different businesses Tesla is now involved in. He believes the auto maker is similar to a platform company like
(AAPL). Apple sells hardware such as phones and computers. It also offers music, entertainment, cloud, and other services on a subscription basis. Tesla, for its part, sells more expensive hardware–namely vehicles–and sells solar roofs and battery storage. It sells software and services such as self-driving upgrades for its vehicles and electricity via its nationwide charging network, too.
Many analysts have focused on the potential of Tesla’s self-driving software and its future robotaxi service. Dorsheimer, however, believes energy storage is a large opportunity as well. He projects $8 billion in energy storage sales by 2025.
After Dorsheimer’s upgrade, about 43% of analysts who cover Tesla stock rate shares Buy. The average Buy-rating ratio for stocks in the Dow is about 60%. Still, 43% is high for Tesla shares. The Buy-rating ratio for Tesla shares was roughly 20% one year ago.
Dorsheimer’s $1,000-plus target is the seventh four-digit price target from the Street. The average analyst price target is at about $660 a share, just below where Tesla stock trades now.
A $1,000 price target values Tesla at roughly $1.2 trillion based on shares outstanding as well as things such as management stock options that are likely to become stock in coming years.
Tesla stock has stalled out in recent weeks. Shares are down about 4% year to date after an epic 743% rise in 2020. Analysts and investors will be looking toward first-quarter earnings, due out April 26, to get a sense of where the stock will head for the remainder of 2021.
For the first quarter, analysts project 76 cents in per-share earnings. Tesla earned 80 cents a share in the fourth quarter. The fourth-quarter number was short of analyst projections, but Tesla delivered more vehicles in the first quarter of 2021 than it did in the final quarter of 2020, making the first-quarter earnings estimate look reachable.
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