Tesla price target doubled to $1,400 at Credit Suisse
Credit Suisse analyst Dan Levy raised his price target on shares of Tesla to $1,400, or twice the $700 target he’d given previously, on the heels of a monster rally that sent shares as high as $1,794.99 on July 13. Yahoo Finance’s Emily McCormick joins Kristin Myers to discuss.
Video Transcript
KRISTIN MYERS: I want to call out right now Tesla, up about over half a percentage point there, 5.2%. They, of course, have been receiving a price target increase from Credit Suisse. So for more details on that, we're joined now by Yahoo Finance's Emily McCormick. Hey, Emily.
EMILY MCCORMICK: Good afternoon, Kristin. And as you mentioned, there was a price target raised from Credit Suisse analyst Dan Levi yesterday. [INAUDIBLE] on shares of Tesla to $1,400, or twice the $700 per-share price target that he'd had it previously. Now, that sounds impressive given the multiple [INAUDIBLE] of what that price target had been.
But keep in mind that Tesla shares are trading above the $1,500 mark at this point and had been as high as nearly $1,800 on July 13th. So that new price target implies 6.7% downside from Thursday's closing price. And Credit Suisse also reiterated its neutral rating on shares of Tesla.
Now, what the firm had to say is here. Quote, "the stock seems priced for perfection. And any material hiccup could drive a correction." Tesla is now the world's most valuable automobile maker, even though it will only sell about 500,000 units this year, or less than 1% of total global volume. To justify the current stock price, we must assume that, by 2025, Tesla will sell 2.2 million units, making it as large as German luxury brands, while trading at an elevated 30 times price earnings multiple.
So clearly here, Credit Suisse really honing in on the fact that Tesla has run up so far and so fast. There is a potential downside risk of a correction in the coming months. At the same time, though, Credit Suisse did call out a couple of potential positive catalysts to the stock, the first one coming up in the near term being, of course, Tesla's earnings results. So those are slated to take place on Wednesday.
That company just needs to post a very modest gap profit in order to be actually considered for inclusion into the S&P 500. That's definitely something investors are going to be watching since that would open up Tesla shares to a much broader range of potential investors. And as you mentioned earlier, we do have Tesla shares trading just around above a half a percentage point now, so steadying after that rally we've seen for July to date. Kristin.
KRISTIN MYERS: All right, thanks so much, Emily McCormick.
