Tesla Motors Inc did something great in recent days. The firm managed to dilute the holdings of its shareholders, and have the market react in a positive way. With the support for the firm on Wall Street, price target upgrades may not be a surprise. Adam Jonas of Morgan Stanley beat any reasonable expectations on Monday morning, however.
The auto analyst for the Wall Street bank boosted his price target on Tesla Motors shares from $280 to $465 on Monday morning. That’s the highest price target on Tesla Motors on Wall Street, and it’s acting like a bit of a magnet in pre-market trading on Monday morning. At time of writing shares in Tesla Motors were selling for $251.55, up 3.45 percent for the morning so far.
Tesla Motors gets $465 price target
The price target hike flies in the face of what appears to be the conventional line on Tesla Motors . The firm’s value is full said Tesla bull Brad Erikson of Pacific Crest, is about right given the risks ahead and the low earnings so far.
That report, combined with a similar missal from Deutsche Bank, saw shares in Tesla Motors fall from their highs above $280 back down to less than $260. Mr. Jonas of Morgan Stanley appears to want to change the outlook on the firm.
He said that stock in Elon Musk’s firm was a “top pick” and said that its knowledge in autonomous tech and machine learning would slowly snowball and take care of the firm’s current efficiency problems.
Mr. Jonas also said he thinks Tesla Motors is “well positioned for fleet management in a shared mobility model.” That means the firm may not sell cars to Uber, it may replace Uber instead. He expects the firm to reveal a product in the area in the next year or eighteen months.
On Friday Trip Chowdhry of Global Equities Research said that he thought the $242 that Tesla Motors sold new shares for was a good entry point for investors. Mr. Chowdhry was previously one of the most hopeful analysts on Wall Street with a $385 price target on shares in Elon Musk’s firm.
Mr. Jonas wild target goes far beyond the $400 price target, from Stifel, that previously marked Wall Street’s high water.
James Albertine from Stifel weighed in on the Tesla Motors opportunity in shared mobility on Monday. After being asked to comment by Benzinga he said that he reckons Tesla will be part of the global push toward shared car ownership.
He didn’t make it clear whether he saw Mr. Jonas’ price target hike as a big moment for the stock, or whether he would take another look at the value he has on shares of Tesla Motors as a result of the insight into the global shared car market.
Counting down the days at Tesla Motors
Warnings that the firm’s value might be full were heard by investors and shares have lost quite a lot of their value in recent weeks. On August 5 Tesla Motors released its earnings numbers for the three months through June. Elon Musk surprised Wall Street by lowering his shipment target for the full fiscal year.
That sent shares below $240′. Adam Jonas, who is joined by Ben Kallo of Baird and Trip Chowdhry of Global Equities Research in a group of more hopeful Tesla Motors researchers, knows that short term shipments simply do not matter to Tesla Motors.
A firm that’s going to ship 50,000 cars per year can’t be worth the $30B that Tesla Motors is valued at by Wall Street. Tesla Motors is worth $30B today because Wall Street believes Elon Musk can sell 500,000 cars in the next five years.
Mr. Jonasof Morgan Stanley reckons that Tesla Motors is worth almost $60B, because he sees Tesla Motors hitting that 500,000 car target and blooming into an autonomous car giant in the years beyond 2020. At time of writing Wall Street seemed to be backing that idea, but