Analyst: Tesla’s growing credibility

The latest data from China and Europe suggests to Wedbush Securities that Tesla’s turnaround may be real. Wedbush analyst Daniel Ives raised the price of Tesla’s stock to $370 from $270, saying strong Model 3 demand and earning power were “on the rise in the fourth quarter.”

Analyst: Tesla's growing credibility

“U.S. consumer demand for Model 3 and a strong, important European market are likely to drive growth this quarter, making it easy for Tesla to meet its 2019 target of delivering 360,000 to 400,000 vehicles,” Ives wrote in a note. “

The analyst added that Tesla’s Shanghai super plant was moving ahead of schedule, fueling the overall bullish Chinese theme.

“If Tesla can sustain this profitability and demand in the future, especially in Europe and China, then the stock will open a new chapter in growth and price-to-earnings expansion,” Ives said. “He maintains a holding rating on the stock.

Tesla’s share stake has risen sharply in the past few months after the company unexpectedly reported third-quarter earnings and said both Chinese factories and model Y crossovers were ahead of schedule. The stock closed Tuesday at a record $425.25.

In addition to improved fundamentals, Mr Ives said, “large-scale short-fills” had also driven up share prices.

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