Tesla’s stock (TSLA) received a new Wall Street high target price from an analyst who doesn’t see EV competition stopping Tesla’s hyper growth.
New Street Research “re-initiated” coverage on Tesla with a $578 per share target, a new high for Tesla on Wall Street, up from $400.
Despite the already insane performance of Tesla’s stock recently, analyst Pierre Ferragu thinks there’s still more to come with more catalysts:
“Tesla’s forced march toward electrification is reaching a tipping point: cost parity is around the corner, barriers to adoption are pushed away, drivers are enthusiastic, and the industry is betting ‘all-in’ on electric.”
The rest of the industry is indeed starting to bet heavily on electric vehicles and several analysts are expecting those bets will impact Tesla’s growth.
Not Ferragu who says that Tesla has a “decade of hyper growth ahead” and has “no credible competition on the horizon.”
The analyst says:
“Competition is around the corner, yes, but it is going to stay there for a while.”
When it comes to Tesla’s low earnings not justifying its valuation, Ferragu brought up Amazon:
“Amazon has traded in the 50x-100x earnings range for over a decade, and we expect Tesla to follow suit,”
Pierre Ferragu ranked #1,967 out of 6,994 analysts on TipRanks with 61% success rate and 5.3% average return.
Here’s his history of ratings on Tesla:
I tend to agree to a degree.
What is important is to make a distinction between dismissing EV competition and its impact on Tesla.
I think new EVs coming to the market are serious and they will have a great impact on electrification, but I don’t think they will necessarily impact Tesla’s growth in any major way.
The next year or two might be more chaotic, but there will soon be a major shift in consumer demand where most people will see that it is a terrible idea to buy a new gasoline-powered vehicle.
At that point, there will be a wide deficit of electric vehicles available compared to consumer demand.
Tesla will be benefiting from that while automakers who are slow to convert their ICE car production to EV production will suffer.
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