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JP Morgan raises Tesla’s price target to $75 on Q3 deliveries

Yahoo Finance’s Emily McCormick joins Kristin Myers to discuss JP Morgan's new price target on Tesla.

Video Transcript

KRISTIN MYERS: Let's talk Tesla right now. One analyst at J.P. Morgan has lifted their price target on that stock. So for more on this, we're joined now by Yahoo Finance's Emily McCormick. Hey, Emily.

EMILY MCCORMICK: Hello, Kristin. And we do have long-time Tesla bear Ryan Brinkman of J.P. Morgan getting slightly less bearish and raising his price target on shares of Tesla to $75 per share. That's up from $65 previously. Now, he did maintain his underweight rating on the stock. Keep in mind that the stock is currently trading around $420 per share. So that price target does imply downside of about 82% from Friday's closing price.

Now, the average analyst price target is about $313 per share, according to Bloomberg data. So J.P. Morgan, one of the more bearish on the stock. That $75 price target among the lowest here on Wall Street. Now, this raise nevertheless comes in light of Tesla's record third-quarter delivery figures, which, as we know from last Friday, were at 139,300 and did top Wall Street's expectations.

Now, we did see the stock sell off a bit last week. That stock down 7% on the day. We are seeing a little bit of dip buying here, a bit of a rebound also in light of this price target race that we had from J.P. Morgan. Also want to note that in note from this morning, we have J.P. Morgan raising its forecast for 2020 total deliveries to come in at nearly 482,000 for Tesla. That's up from about 467,000 that they estimated previously.

Now, that would still be on the lower end of guidance that Tesla CEO Elon Musk had suggested at the company's investor day in September when he said deliveries would grow between 30% and 40% versus 2019 to imply deliveries of as much as 514,500 so far this year. Now, finally, I do want to note that J.P. Morgan also introduced for the first time a 2022 deliveries estimate of 768,500 and earnings per share for that year of $3.35.

Still quite a bit below that $4.78 consensus estimate we have here for earnings in two years on this company. But something also to note now that we are getting these estimates out of J.P. Morgan. Now again, we do see that stock trading just a bit higher, up about 1.4% now to $421 per share. Kristin.

KRISTIN MYERS: All right, thanks so much, Emily.