Tesla stock climbed again today as several analysts finally gave up their bearish views. Tesla Inc. (NASDAQ:TSLA) shares climbed by about 6% early in the day and were holding steady by midday. At least two boosted their price targets for Tesla stock. Meanwhile, the automaker resumed deliveries of the Model 3 cars it built in China after pausing as a result of the coronavirus outbreak.
Q4 2019 hedge fund letters, conferences and more
Analysts boost Tesla stock target for possibilities
Morgan Stanley analyst Adam Jonas almost doubled his bull case price target for Tesla stock from $650 to $1,200 per share. If the shares do climb that high, the EV maker would have a market capitalization of $220 billion. Jonas' base case for the stock rises from $360 to $500 per share. Although his bull case target is much higher, he maintained his Underweight rating on Tesla stock due to his base case price.
The analyst's new bull case for Tesla stock is predicated on an "aggressive assumption" that the automaker could secure 30% of the global market for EVs. He said it assumes that Tesla delivers 4 million vehicles by 2030 and may have the potential to supply electric motors, batteries and powertrains to other automakers.
Bernstein analyst Toni Sacconaghi called Tesla "the ultimate 'possibility' stock." He expects the automaker's core addressable market to increase by more than 30 times in the next two decades. He added that even if the company's current share of the EV market is halved, it would still see 15-fold growth in its addressable market. Sacconaghi has the equivalent of a Hold rating on Tesla stock.
Ark Invest analyst Cathie Wood is as bullish as ever on Tesla stock. She continues to believe the shares could reach $7,000 in the next five years. However, she is in the minority as FactSet data shows that 45% of analysts have a Sell rating or the equivalent on Tesla stock.
Wood told CNBC's Squawk Box that the shares will climb higher due to declining battery costs and demand from China. Even though most analysts are skeptical about Tesla stock due to its extreme valuation, she believes their skepticism amounts to "a wonderful wall of worry."
She said declining battery costs will result in increased adoption of EVs, noting that Reuters reported that the automaker was talking to CATL about using its cobalt-free batteries in the cars it makes in China. Because of declines in battery costs, she believes that the average price of an electric vehicle will fall below the average price of a combustion engine vehicle within the next two years.