Shares of Tesla Inc increased 13% to a record high on Monday, extending their rally to more than 40% in five sessions after analysts raised their price targets on the electric automaker following its strong quarterly deliveries.
The day’s jump has boosted Tesla’s stock market value by $30 billion, eclipsing the entire value of Ford Motor, currently at $25 billion.
JMP Securities boosted its price target to $1,500 from $1,050 after Tesla on Thursday reported high second-quarter vehicle deliveries, defying plummeting sales in the wider auto industry as the coronavirus pandemic hit the global economy.
“We believe that the question to be considered is not whether the stock is expensive on present valuation measures, but what the company’s growth and competitive position signal about the stock’s potential for the next several years,” JMP Securities analyst Joseph Osha wrote in a client note. Osha predicted that Tesla’s annual sales could hit $100 billion by 2025.
JPMorgan, which rates Tesla “underweight,” raised its price target to $295 from $275, while Deutsche Bank increased its target to $1,000 from $900. The median analyst price target for Tesla is $675, compared with its present price of $1,372, according to Refinitiv.
The automaker’s solid delivery figures heightened expectations of a profitable second quarter, which would mark the first time in the automaker’s history that it would report four consecutive quarters of profit.
However, with Tesla’s stock up almost 500% over the past year, many investors believe the rally is unsustainable. The stock is trading at 158 times expected earnings, Refinitiv noted, an exceptionally high valuation.
After Monday’s surge, Tesla’s market capitalization stood at $245 billion, increasing its lead as the most valuable automaker globally.