Tesla shares extended their 2019 rally in the first trading day of the new year as analysts expressed optimism about the company’s upcoming fourth-quarter production and delivery data. Tesla rose nearly 3 percent Thursday to about $430 after a 26 percent gain last year. The stock hit a record $430.94 on December 26. Canaccord Genuity analyst Jed Dorsheimer had earlier raised Tesla’s target price by 37 percent to $515 from $375, while maintaining its buying rating for the stock since February 2019.
“We believe the trend towards car electrification will only accelerate in 2020,” Dorsheimer wrote in a note to customers. While demand issues arising from the expiration of subsidies remain a concern for Tesla, Tesla’s strong performance in the third and fourth quarters will allay those concerns and address them after credit expires. “
Dorsheimer expects Tesla to report fourth-quarter results next week showing delivery of 368,965 vehicles, above the lower limit of the company’s guidance range of 360,000-400,000 vehicles.
In addition, Daniel Ives, an analyst at Wedbush, said Tesla is expected to easily meet its delivery targets as U.S. consumerdemand for the low-cost Model 3 and strong push from Europe. But he maintained the company’s rating as neutral and reiterated its target price of $370, 13 per cent below current levels.
Tesla’s share price has surged in 2019, surging 74 percent in the fourth quarter.
Mr Ives said part of Tesla’s rally was a “massive short-back” as the sharp rise in prices prompted shorts to abandon their bets but were also “driven by improved fundamentals”. Ives called Tesla’s third-quarter results “like Picasso’s paintings” and said the company’s capabilities have been recognized by Wall Street.