By
Svetlana Soroka
April 18th, 2024
The $1,200 price forecast from Piper Sandler’s analysts takes its backing from the evidential business potentials of the company.
The shares of electric vehicle maker Tesla Inc (NASDAQ: TSLA) has edged 5.83% higher on Monday following a price upgrade from Piper Sandler analyst Alexander Potter. As reported by TeslaRati, Potter, a top-ranked Wall Street analyst revised his price target for Tesla from $515 per share to a street high of $1,200 per share, complemented with an ‘Overweight’ rating for the stock.
The hype around Tesla and its growth potentials have been described by the Piper Sandler analysts through a multi-page Research note with the note that the electric vehicle maker is taking on trillion-dollar industries. The research detailed the fact that the inclusion of Tesla to the S&P 500 Index (INDEXSP: .INX) cannot make Wall Street disregard the stock ever again. The redirection of Tesla to the path of profitability that fueled the S&P addition ranked top amongst the reasons for the new price projection from the analysts.
“Our forecast of peak vehicle production (9M units/year) is also materially below Tesla’s own ambitions, based on capacity plans outlined at Battery Day. Plus we could be under-modeling Tesla’s solar revenue, as well as “Autobidder” and other opportunities in the Energy segment (these businesses are still nascent),” Potter wrote in his research note.
The bullish stance of Potter sent the shares of Tesla up by 5.83% on Monday and by 1.57% today in the pre-market to $853. The current trading is also seeing a sustained boost ahead of what appears to be a bullish day ahead.
Piper Sandler Forecast Cites Tesla Business Innovations
The $1,200 price forecast from Piper Sandler’s analysts also takes its backing from the evidential business potentials of the company. According to the research note, the Full Self Driving (FSD) technology the company is developing which is billed to be integrated on a mainstream level by 2030 as well as its estimated car deliveries will also present a big boost to the company’s earnings in the near future.
“Our forecast implies 894k vehicle deliveries in 2021, eventually ramping to 9M+ units in 2030. Note that this level of production would rank TSLA among the top-3 auto makers globally. More important still, we anticipate a steady ramp in full self-driving (FSD) software adoption starting in 2030, with 50%+ of all Tesla owners using the FSD package by the end of our forecast period. This should have a big impact on margins, with EBIT margin eventually exceeding 40%,” wrote he.
The analyst noted that its auto-delivery projections are outrightly conservative when compared to Tesla’s own forecast. With the new price projection, all eyes will be on Tesla to watch its performance in the quarters ahead.