By
Svetlana Soroka
April 18th, 2024
Tesla stock climbed as much as 6% on Wednesday, boosting the company’s market value to more than $88 billion, which is more than Ford Motor Co. and General Motors Co. combined.
Tesla can definitely say that it began this year with a record being the highest U.S. automaker in history. The company’s recent stock rally pushed its market value to approximately $85 billion. Just on Tuesday’s close, it surpassed the $80.8 billion, the record previously set by Ford back in 1999.
However, just for comparison, Ford had a market value of only $37 billion at the end of trading on the same day.
Tesla’s shares continued to climb and traded up more than 4% on Wednesday and at the time of writing in after-hours trading, they were up 0.79% to $496.05. So far in 2020 the stock grew more than 12%.
The company had already surpassed the market values of not just Ford but also other very famous car behemoths: General Motors, which was valued with around of a $50 billion at Tuesday’s close, and Fiat Chrysler, which had a value of about $22 billion.
However, beating Ford’s record means even more for Tesla because this is the first time it managed to do so.
Still, even though Tesla did overtake U.S. auto companies regarding their market value, it is still belittled by non-U.S. automakers. For example, at the end of trading on the same day, Japan’s Toyota had a market value of around $232 billion, and Germany’s Volkswagen had a value of roughly $98 billion.
Company Delivered 367,500 Vehicles in 2019
Last week the company said it exceeded the low end of its guidance by delivering 367,500 vehicles in 2019, a record number and 50% more than in 2018.
Emmanuel Rosner, an analyst at Deutsche Bank, wrote in a note:
“We believe this new solid quarter of deliveries could further put to rest investor concerns around softening demand for Tesla’s product. While bears will likely argue 4Q deliveries benefited from strong purchases ahead of tax credits expiring in various countries, Tesla is just about to start deliveries of locally made Model 3s in the very large China market, at an attractive price point.”
Be it as it may, Argus Research analyst Bill Selesky thinks Tesla stock could hit $556 within 12 months. That price target is the highest on the Street, and it’s up from his previous 12-month price target of $396.
Selesky also said that one of the main reasons is better-than-expected fourth-quarter deliveries and the rapid construction and subsequent start of Model 3 production at Tesla’s factory in China. Elon Musk, whose $29.3-billion fortune is mostly depending exclusively on Tesla stock, has had a spring in his step lately. He danced on stage at Tesla’s factory outside Shanghai to celebrate delivering the first Model 3 sedans to public customers in China.
Stock Has to Reach $554.80
Just for a reminder, Tesla delivered a record 112,000 vehicles in Q4, which were 6,000 more than analysts expected.
The company also said it had “demonstrated production run-rate capability of greater than 3,000 units per week at our new factory in China, excluding local battery pack production which began in late December.”
The simple fact is, that during the last year, the company managed to reach two of the milestones for Musk’s award: it earned more than $20 billion in aggregate revenue over four quarters and, booked more than $1.5 billion in adjusted earnings before interest, taxes, depreciation and amortization over that span.
For Tesla to achieve a $100-billion market value, its stock has to reach $554.80. however, let’s be real – this will not happen short-term. Both the six-month trailing share price average and the 30-day trailing average have to surpass that figure before the first tranche of options is released.