Tesla Inc Price Target Increases Boost Shares Near Record High

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Analysts from multiple firms have boosted their Tesla price target over the last week, with the company’s biggest bull now forecasting a 25% increase from the Model 3. Morgan Stanley and Baird were quick to answer last week’s upgrade from Argus, although they’re not even close to Argus’ Tesla price target—unless you look at Morgan Stanley’s bull case rather than its base case.

Tesla shares surged by about 2% during regular trading hours on Monday following the price target increases. They continue to hover just below the all-time high of $386.99.

Tesla price target to $317

Morgan Stanley analyst Adam Jonas, who’s been a perma-bull on Tesla for quite some time, increased his base case price target from $305 to $317 per share in a note to investors dated Aug. 14. His bull cash rises from $511 to $526 per share. He cited stronger volumes for the Model 3, which raised his estimates for the company.

Following the first deliveries of the Model 3, he’s now expecting 1,500 of the mass-market EVs to be delivered during the third quarter, while he had previously been forecasting zero deliveries until the fourth quarter. He increased his Model X delivery forecast also, which brings his total vehicle delivery estimate to 106,552 from 96,219 previously.

However, he cut his average transaction price for the Model 3 to $50,000 from $60,000. However, he manages to spin even this into a positive for Tesla, suggesting that it could mean that the EV maker will sell more cars. He even feels that the Model 3 could be helping demand for the Model S and Model X, contrary to all the cannibalization concerns most analysts have. He explained that more luxury car buyers may buy a Model S or Model X because the Model 3 makes Tesla look like a more viable company.

A new bull came to town last week

Baird analyst Ben Kallo boosted his Tesla price target from $368 to $411 in a note on Monday. He warned investors that it isn’t wise to bet against Tesla and especially, the Model 3, because demand is expected to be strong. He also noted that other catalysts should increase the automaker’s shares and reiterated his Overweight rating on them. His new Tesla price target is the fourth-highest of the analysts that report FactSet.

Kallo believes Tesla shares will perform in a similar fashion to how they did when the company launched the Model S and not like they did around the Model X launch. The reason he believes this is because the Model S and Model 3 were both seen as much more disruptive than the Model X. At first after the Model 3 was launched, Tesla shares declined before turning sharply higher in the long term.

Last week, Argus Research analyst Bill Selesky raised his Tesla price target higher than the targets of any other analysts reporting to FactSet, and today’s target increases don’t even come close to his new target. Selesky’s Tesla price target moves to $444, and he upgraded the company from Hold to Buy, citing strong Model 3 orders. He noted that the EV maker is getting about 1,800 orders for the car every day without much advertising or marketing.

Tesla shares peaked at about 2% higher on Monday, touching $367.66 during regular trading hours.

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