Tesla Stock Could Surge Over 50% From Current Levels, Says Analyst
Uncertainty is all around us these days, from the economic outlook to the effects of climate change to covid-related issues, but one thing almost everyone agrees on; Electric vehicles (EVs) are the future of the auto industry.
After conducting a quarterly review of global EV sales, Piper Sandler analyst Alexander Potter notes recent months have seen EVs making further inroads, with sales on the up, particularly in Europe and China. Market-wide vehicle sales show that for the past 3 months (through August), EVs account for 12% of overall sales in China, 10% in Europe and 3% in the United States.
Competition is only intensifying with both new startups and legacy auto makers looking to claim a piece of this flourishing industry. Potter thinks the current undisputed EV leader Tesla (TSLA) will eventually have to contend with losing some of its current dominance, especially in the U.S., once other EV makers’ models hit the market. Interestingly, however, Potter doesn’t actually think this is a “bearish signal,” expecting Tesla’s overall market share to continue rising. “After all,” says the 5-star analyst, “Tesla is competing against vehicles of all types – not just against other electric vehicles.”
Furthermore, while Potter warns of declining market share ahead, based on recent performance, the EV leader has been gaining market share. Potter says that due to a focus on domestic deliveries rather than exports, investors will find China market share has inflected higher in September. Accordingly, Potter has now increased his 2021 estimates, believing Q3 will be TSLA's “strongest quarter ever.”
Based on reports of “strong production,” the analyst now expects Tesla will deliver 233,000 vehicles in Q3 and anticipates total 2021 deliveries of 894,000 compared to the prior estimate of 846,000.
What this all means for investors? Potter gives TSLA a $1,200 price target, a Street-high, to back his Buy rating on the stock. His target suggests room for a 55% uptick over the next 12 months. (To watch Potter’s track record, click here)
As usual, however, Potter’s take is one of many wildly differing views concerning the EV leader’s prospects. The majority say Buy – 12 analysts, in fact – but there also 7 Holds and Sells, a piece, all coalescing to a Hold consensus rating. What’s more, despite Potter’s exuberant outlook, going by the average price target, shares are expected to drift lower; the figure clocks in at $690.18, implying the stock will be changing hands for an 11% discount a year from now. (See Tesla stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
