Tesla (TSLA) surges to new all-time high on huge rental order and new $1,200 price target

Tesla’s stock (TSLA) is reaching new all-time highs today on a huge rental order of 100,000 cars and a new $1,200 target price from Morgan Stanley.

The stock was already flirting with a new all-time high last week after the automaker delivered some record financial results for the third quarter 2021.

But today, it broke through the all-time high with a 5% increase at the market open.

Tesla’s stock is now trading at as much as $960 a share.

Part of the rise this morning can be attributed to Hertz announcing that they ordered 100,000 Tesla vehicles to electrify their fleet.

With the order being valued at $4.2 billion, it unsurprisingly boosted the stock price.

However, Tesla’s stock was already up premarket by as much as 3% on a new note from Morgan Stanley.

In the note, the firm announced that it is raising its price target on Tesla’s stock from $900 to $1,200 per share.

The increase is primarily due to increasing the automaker’s expected volume in the coming years:

Following Tesla’s better than expected 3Q results, we are raising our price target to $1,200 (from $900 previously) and reiterate our OW rating. The change in target is driven predominantly by higher volume. Our previous forecast of 5.8 mm units by 2030 implied an annual growth rate of 23% (from 2021 to 2030) which trailed overall EV market growth. Our revised volume forecast of 8.1mm by 2030 units implies an annual growth rate of 28% which is slightly more than 1/2 the 50% growth rate targeted by the company over the long term which they reiterated in the 3Q call.

For a TSLA bull, the firm has always had relatively conservative volume projections.

Even with this increase today, it remains significantly behind Tesla’s own growth projections of 20 million vehicles per year by 2030:

We note that Tesla is currently growing sales YoY by approximately 70%. Why don’t we use the company’s 50% growth rate? Many reasons we can get into later including: elongated supply chain constraints, infrastructure constraints and a host of competitive and geopolitical forces that will guide the development of national electric transport ‘utilities’ over time.

Nonetheless, Morgan Stanley believes that Tesla’s manufacturing approach, specifically with its giant casting machine, will give it an edge.

Adam Jonas, the Morgan Stanley analyst in charge of covering Tesla, is ranked No. 650 out of 7,706 analysts on TipRanks.

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