Tesla Gets Street-High Target as Piper Says ‘Fireworks’ Not Over

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Feb 01 2021, 7:55 PMFeb 01 2021, 9:09 PMFebruary 01 2021, 7:55 PMFebruary 01 2021, 9:09 PM

(Bloomberg) -- Investors who missed out on the searing rally in Tesla Inc. shares last year needn’t worry, as one Wall Street analyst on Monday said the “fireworks aren’t over,” with the company targeting multi-trillion dollar markets.

Piper Sandler’s Alexander Potter more than doubled his price target on the electric vehicle maker to a Street-high of $1,200 from $515, the latest in a string of similar moves by several analysts, who expect the Elon Musk-led company to grow aggressively and maintain its leadership position in the EV industry.

“With Tesla’s target industries still embracing outdated business models, it may be decades before this company runs out of new opportunities to pursue,” Potter wrote in a note to clients. The analyst maintained his buy-equivalent rating on the stock.

After rising more than 8-fold in 2020, Tesla shares are up another 12% so far in 2021 after reporting strong delivery numbers for the fourth quarter. However, the shares pared some of its best gains after profit for the period disappointed and the company refrained from providing a specific delivery guidance for 2021. The stock was up 3% premarket Monday.

While the surge in Tesla’s share price led investors to hunt for smaller EV players and startups, the sector has also benefited from a growing acceptance among analysts and others that electric cars will dominate the automotive industry, with governments around the world announcing policies to encourage the phasing out of gas-fueled cars.

Potter expects Tesla to deliver 894,000 vehicles in 2021, eventually increasing to more than 9 million units in 2030, making it among the top-3 automakers globally. The analyst also expects to see a steady ramp up in the adoption of Tesla’s full self-driving (FSD) software starting in 2030, with more than half of all Tesla owners using the FSD package by the end of 2040.

Other EV stocks were also rising premarket, including Nio Inc., Workhorse Group Inc., XPeng Inc., Lordstown Motors Corp., Li Auto Inc., Kandi Technologies Inc. and Fisker Inc. Earlier on Monday, Nio said it delivered 7,225 vehicles in January, up more than 350% from last year.