Tesla’s stock (TSLA) is getting a boost this morning after receiving a new Wall Street high price target of $2,500 partly based on Battery Day expectations.
After market opening today, Tesla jumped by as much as 4%.
It can be partly attributed to Jefferies analyst Philippe Houchois increasing the firm’s price target on Tesla’s stock from $1,200 to $2,500.
Houchois sees Battery Day as an important catalyst:
“Tesla’s competitive edge in cars may soon start to shrink but continues to widen in multiple other dimensions, from brand leverage and software to battery capacity and industrial efficiency. In our view, nothing matters more on ‘Battery Day’ than understanding how the ‘Million-mile’ batteries could profoundly change the auto business model.”
Battery Day is going to be held on September 22 and Tesla is expected to announce its plan to scale battery supply through its own battery cell production.
Jefferies notes that the new price target amounts to $500 on a split-adjusted basis since Tesla’s stock is set to execute its 5-for-1 stock split Friday after market close.
It’s now the second time this year that Jefferies has doubled their price target on Tesla.
I’ve been warning the shorts over the past month that they should probably stay away from Tesla’s stock ahead of Battery Day.
Based on the latest short interest information on Tesla’s stock, it looks like they are doing just that and it contributed to Tesla’s stock price increase over the last month.
But now, I would also warn people that are long Tesla like me that it might turn out to be a buy the rumor and sell the news type of event.
It wouldn’t be the first time.
I have a feeling that there will be a few surprises that will mitigate that effect, but I don’t know for sure.
It should be an interesting few weeks leading up to the event with the stock split and then Battery Day.
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