- Wedbush analyst Dan Ives raised his price target for Tesla shares to $475 from $380 on Thursday, citing stronger-than-expected deliveries in China.
- The new target implies a 12% gain from the automaker’s Thursday closing price of $423.43.
- China is a “key market” for Tesla that could make up 40% of global sales as early as 2022, Ives said.
- The analyst also cited the automaker’s September 22 Battery Day as a “linchpin event” for his higher valuation target.
- Watch Tesla trade live here.
Tesla deliveries in China are tracking higher than anticipated over the third quarter, leading Wedbush to lift its price target for the electric automaker.
Analyst Dan Ives raised the firm’s target to $475 from $380 on Thursday, implying a 12% rally from the company’s Thursday closing price of $423.43. The country is a “key market” for Tesla moving forward, Ives said, as the automaker’s Gigafactory in Shanghai stands to raise Model 3 margins above those seen in the US and Europe.
“Pent-up demand” and recent price cuts are fueling “increased market share vs domestic competitors as the Giga 3 success story continues to play out,” the analyst added.
Ives maintains a “neutral” rating on the shares.
Wedbush sees “clear momentum” for Tesla sales in China through the rest of the year. The firm raised its third-quarter deliveries estimate accordingly, to 130,000 vehicles from 124,000. The new target marks a 34% improvement from the year-ago period and sets Tesla up to reach 470,000 total deliveries in 2020.
Ives also projects China deliveries to make up 40% of Tesla’s order book as early as 2022.
For investors seeking a near-term boost to the automaker’s share price, Tesla’s September 22 Battery Day will be a “linchpin event” for a loftier valuation, Wedbush said. The company is expected to unveil new battery cell technology and a power unit able to drive for one million miles.
The new cells are also set to reduce production costs, and doing so “would give Tesla much more financial flexibility” to price its models competitively with legacy automakers, Ives said.
Tesla closed at $423.43 per share on Thursday, up 406% year-to-date.
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