Tesla has a new top price target on Wall Street. In fact, it has two new top price targets. However, investors can be forgiven if they miss.
The target prices come from foreign brokerage firms and show how Tesla is on the mind of nearly every auto analyst around the world.
On Friday, China Securities analyst Zhu Ye began coverage of Tesla (ticker: TSLA) with a buy rating and a $1,485 price target. On Monday, Mirae Securities analyst Park Yeon-joo roughly matched it. Yeon-joo raised its target price from $937 per share to $1,466. She also rates the shares.
Both targets value Tesla at about $1.5 trillion. Tesla has about 1 billion shares outstanding, so that makes the math simple.
Tesla’s stock is up 4.6 percent in afternoon trading on Monday. The new rating helps, but came news that Tesla’s Germany facility will begin production in December. The special thing is that the market is jumping again due to heavy losses on Friday. The S&P 500 and the Dow Jones Industrial Average are up 1.6% and 1%, respectively.
Both new target prices are well above Jefferies analyst Philippe Houchois’ old high of $1,400 per share.
Exactly why both analysts value Tesla at those prices is a mystery. Both did not return requests for their research reports. Works in Beijing, according to Businesshala, and primarily covers EV and EV battery material stocks. Yeon-joo works in Korea and covers the Korean auto sector – and Tesla.
Foreign coverage is a sign that Tesla is disrupting the entire auto industry.
EVs seem to be taking over and most of the big global automakers are pouring billions of dollars into vehicle electrification. Battery costs have dropped to the point where EVs can compete with gasoline-powered cars regardless of government-mandated environmental policies.
Tesla certainly led the charge by introducing the Model S back in 2012. Now most global automakers are looking to Tesla as a benchmark for EV success.
About 45 analysts cover Tesla stock. This is an interesting mix. At least five analysts are based in Asia. Some are located in Europe. At least five are primarily technology or renewable technology analysts. Some analysts covering stocks are generalists covering multiple industries. And the rest are traditional auto analyzers.
Compare this to General Motors (GM). About 25 analysts cover that stock, and most of them are US-based automotive analysts.
Tesla stock now has about 22 buy ratings and 13 sell ratings. About half of purchases come from non-traditional or non-U.S. auto analysts. That means Tesla is relatively more popular with tech analysts and analysts based in non-U.S. geographies where EV penetration as a percentage of new car sales is higher.
In China, EV penetration in new car sales reached nearly 20% in October. EV penetration in the US is close to 3%.
The 13 sell ratings on Tesla stock are from a mash-up of analysts all — technical analysts, auto analysts, generalists and renewable energy analysts.
The average Tesla price target for buy-rated analysts is now about $1,164 per share. Sell-rated analysts have an average price target of about $388 per share. The gap between bulls and bears remains wide, no matter where they are located.
Write to Al Root at [email protected]