Tesla could rally to $1,000 this year as demand from China remains strong and the global chip shortage subsides, Wedbush says

Tesla Model 3
Tesla Model 3

Tesla could roar higher in 2021 as demand looks strong so far and the global semiconductor chip shortage will only be a temporary setback for the EV giant.

That’s according to Wedbush’s Dan Ives, who has an “outperform” rating for the stock and price target of $1,000, a nearly 49% jump from current levels.

In a Monday note, the senior technology analyst noted three “perceived headwinds” that Tesla is facing right now: the chip shortage, political blowback in China from recent safety issues, and rising electric-vehicle competition around the globe.

As Elon Musk appeared on SNL, Lucid Motors, Ford, and Volkswagen all showcased their flagship eclectic vehicles in separate advertisements during the broadcast. But Ives said that Tesla remains the leader in the market, and underlying consumer demand looks robust in China and Europe.

“The main line in the sand now for the bulls and bears is not the near-term chip shortage in our opinion (which is temporary), but rather Tesla’s ability to further penetrate China,” Ives said. “Now it’s about Musk playing nice in the sandbox which appears to be happening over the last few weeks around safety issues and making sure that Tesla does not see any stumbles/government crackdown in China which is poised to represent 40%+ of global deliveries by 2022.”

The analyst estimated that Tesla appears to be able to comfortably exceed 200,000 delivery units in the second quarter, even factoring in the chip shortage. For the next few months, Ives is keeping an eye on Tesla’s Model Y production and demand, the Model S and X makeovers, and Tesla’s higher margin software and FSD (full self-driving) purchases.

Ives said he is still bullish on the EV sector despite the risk-off selling the industry has faced over the last few months. Shares of Tesla slipped 3% Monday morning to $651.59, and the EV giant is down over 5% year-to-date. Meanwhile competitors Fisker and Nikola are both down more than 23% in the same time period, and Lordstown Motors has tumbled 60% in 2021 amid short-seller reports.

Read more: Credit Suisse says buy these 15 stocks that represent its analysts’ ‘highest-conviction’ calls and are set to outperform despite the market’s doubts

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Tesla stock is soaring on record quarterly deliveries, but the EV maker is ‘barely growing’, stock research chief says

esla head Elon Musk arrives to have a look at the construction site of the new Tesla Gigafactory near Berlin on September 03, 2020 near Gruenheide, Germany.
Tesla head Elon Musk arrives to have a look at the construction site of the new Tesla Gigafactory near Berlin on September 03, 2020 near Gruenheide, Germany.

Tesla stock is soaring after posting record quarterly delivery figures and landing continued support from analysts, but not everyone on the Street believes in the EV maker.

GLJ Research CEO Gordon Johnson told CNBC on Monday that he wasn’t impressed by Tesla’s recent delivery figures. The CEO holds a $67 price target on shares of the EV leader.

Johnson argued Tesla is “barely growing” despite “15 price cuts in the first quarter of this year” in his interview with CNBC’s Morgan Brennan and Loop Ventures’ Gene Munster.

The stock research chief said that “year-over-year growth is irrelevant” at Tesla due to changing sales patterns and a Chinese rollout and noted that the EV maker turned in just 2% sequential growth from the fourth quarter of last year to the first quarter of this year.

According to Johnson, Tesla “picked the low hanging fruit of entering the world’s largest three auto markets, US, China, Europe, and their sales grew just 2% quarter over quarter, despite 15 price cuts in the first quarter this year, 18 price cuts in total last year, and 52,500 more cars of capacity sold. “

Johnson also noted that Tesla sold “significantly less higher-margin S and X cars and significantly more lower margin model 3 and Y cars in the quarter.” According to the CEO, that could mean a $300 to $500 million hit to the company’s bottom line.

“So you’re looking at a company, a high growth company, that’s barely growing, is losing more money doing so, and is going to see all of its credit sales disappear next year,” Johnson said. “We see that as a big problem.”

Johnson was referring to tax credits that Tesla buyers receive for purchasing an electric, emissions-free vehicle. The credits are set to disappear in 2022, but some analysts believe President Joe Biden’s $2.3 trillion infrastructure plan will restore them before that happens.

Johnson also compared Tesla to Volkswagen in the interview, arguing Tesla’s current valuation doesn’t make any sense in relation to its peers.

Tesla is valued at close to $700 billion despite selling just 184,000 cars in the first quarter, while VW sells about 2.5 million cars a quarter and is valued at roughly $140 billion.

Some say Tesla’s valuation is based on its growth, but with the EV maker growing sales at just 2% sequentially, Johnson said he doesn’t “know what people are talking about when they say this is transformational growth.”

Read more: RBC says to buy these 30 high-conviction stocks that represent its analysts’ top global ideas for 2021 amid an economic reopening and rising inflation expectations

Gene Munster, Loup Ventures founder, commented after Johnson’s argument and said that he believes it’s unfair to look at sequential growth due to the first quarter being a “seasonally light quarter.”

Munster said he believes competition is the biggest risk to Tesla, but as long as the “value of car exceeds the competition” that Tesla will be able to “continue to have a measurable piece of a massive total addressable market.”

Dan Ives of Wedbush put out a note on Monday upgrading Tesla to an “outperform” rating and tagging a $1000 price target on the EV giant.

The analyst said he expects a roughly “$10,000 credit to catalyze EV consumer demand” moving forward.

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Tesla’s stock price surged 740% in 2020. Here’s where 5 analysts say the shares are headed next.

FILE PHOTO: The logo of Tesla is seen at a branch office in Bern, Switzerland March 25, 2020. REUTERS/Arnd Wiegmann
Logo of Tesla is seen at a branch office in Bern

  • Tesla’s stock price skyrocketed 740% in 2020, but Wall Street is split on where the shares will move next.
  • JPMorgan sees the electric vehicle company plummeting 87% to $90 a share in 2021. Meanwhile Goldman Sachs has a 12-month price target of $780 for Tesla. 
  •  Here are five Tesla price targets from Wall Street’s top strategists.
  • Visit Business Insider’s homepage for more stories.

2020 was a wild ride Tesla’s stock. It opened on January 2 2020 at $84.90 (adjusted for the stock split) and will close 2020 above $700-that’s a gain of over 740%. Here’s where five analysts say Tesla shares are headed in 2021. 

JPMorgan

JPMorgan analysts rate the stock “underweight,” with a price target of $90, an 87% drop from current levels. 

Tesla stock is “in our view and by virtually every conventional metric not only overvalued, but dramatically so,” a team of JPMorgan analysts led by Ryan Brinkman said earlier in December.

Goldman Sachs 

Goldman Sachs has a “neutral” rating for Tesla and 12-month price target of $780. On December 2, analysts led by Mark Delaney raised the price target to $780 from $455, telling clients: “We believe that the shift toward battery electric vehicle (EV) adoption is accelerating and will occur faster than our prior view.” 

Read more: Jeremy Grantham’s GMO called the dot-com bubble. His firm now sees ‘very odd and speculative things’ going on again – and warns large US stocks could see negative returns over the next 7 years.

Wedbush Securities

Wedbush’s Dan Ives rates the stock “neutral,” with a 12-month price target of $715, and a bull case price of $1000.

“Heading into year-end and 2021, we are seeing a major inflection of EV demand globally with our expectations that EV vehicles ramp from ~3% of total auto sales today to 10% by 2025,” Ives said on Dec 29 in a note to clients. “We believe this demand dynamic will disproportionately benefit the clear EV category leader Tesla over the next few years especially in the key China region which we believe could represent ~40% of its EV deliveries by 2022 given the current brisk pace of sales.” 

CFRA Research

Garrett Nelson, senior equity analyst at CFRA Research senior equity strategist has a “hold” rating on Tesla and a 12-month price target of $750.

“After a YTD run-up of over 700%, we think future growth expectations are now appropriately bullish and after a multi-quarter run of positive news, we struggle to identify the next catalyst in the story. In early January, TSLA will report Q4 vehicle production/sales, and we continue to forecast it will fall just shy of TSLA’s full year sales goal of 500K units,” Nelson said. ” While TSLA has materially strengthened its balance sheet through recent equity offerings, the company’s longer-term growth plans will require significant capital and we anticipate TSLA will face some bona fide competition in the EV space from Lucid, Rivian, and others in 2021.” 

RBC Capital Markets 

RBC Capital Markets has a $339 price target for Tesla, more than a 50% drop from current levels.

“Our $339 price target takes a look at EV/sales- and EV/EBITDA-based multiple approaches and probability weights them (65% base, 17.5% each for upside/downside),” analysts led by Joseph Spak said on Dec 22. 

Read more: JPMorgan unveils its 50 ‘most compelling’ stock picks to buy for 2021 – and details why each one will be a top performer

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Tesla could soar another 300% as the company expands its tech outside of the auto industry, says a prominent VC investor

FILE PHOTO: Tesla Inc CEO Elon Musk dances onstage during a delivery event for Tesla China-made Model 3 cars in Shanghai, China January 7, 2020. REUTERS/Aly Song/File Photo
Tesla Inc CEO Elon Musk dances onstage during a delivery event for Tesla China-made Model 3 cars in Shanghai

  • Tesla could soar over 300% to reach $2,500 in the next three years, says venture capitalist and veteran tech analyst Gene Munster.
  • The Loup Ventures co-founder told CNBC Tesla will use its current technology to expand beyond the auto industry and into areas like insurance, autonomy, and HVAC.
  • “They’re going to evolve outside of cars longer term,” Munster added.
  • Shares of Tesla reached an all-time high of $615 shortly after the opening bell on Monday. 
  • Visit Business Insider’s homepage for more stories.

Tesla could soar over 300% to $2,500 within the next three years, according to venture capitalist and veteran tech analyst Gene Munster. A move like that would push Tesla’s current $567 billion market capitalization to over $2 trillion. Only one other company in the world-Apple-has passed that number to date.

The Loup Ventures co-founder told CNBC on Monday that Tesla will evolve over the next few years to become more than just a car company.

“They’re really going to take their tech that they’re defining and pioneering with auto and apply it to new markets,” he said.

Munster discussed how Tesla CEO Elon Musk recently said that the company may enter into the insurance business, HVAC space, and autonomous vehicle industry. 

“Elon has recently said that 30 to 40 percent of the value the car could be in insurance,” said Munster. “What that means is that they can start offering their own insurance and improve margins. That’s high margin revenue, not to mention everything they’re doing around over-the-air updates with autonomy and what they can even do around HVAC.”

Read more:Market wizard Chris Camillo grew his trading account by $9.7 million in 2020. Here’s the simple strategy he’s using to mint millions.

Munster also pointed to flying taxis as another frontier Tesla may expand to that could propel it’s stock price, though he added: “I would not invest in Tesla based on that, but the concept that this company is going to continue to evolve and be a tech leader in the next decade, I’m on board with that.”

Munster added that the “ship has sailed” for traditional auto companies to compete with Tesla, though Volkswagen followed by GM are in the best positions to “remotely compete” with the electric vehicle maker.

“There’s no substance competition, they’re going to evolve outside of cars longer term,” he said of Tesla.

The venture capitalist, who spent over 20 years as a tech analyst on Wall Street, said that Apple could be the biggest company to compete with Tesla over the longer term. 

“Whatever [Apple’s] ambitions are in vehicles, I mean it’s been really quiet there, I’m not expecting anything in the near term, but that as a Tesla investor would be the one announcement that would cause me to step back and rethink things,” said Munster.

Shares of Tesla reached an all-time high of $615 shortly after the opening bell on Monday. 

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