Argus Research is a forward-thinking, long-standing independent investment research firm that offers forecasts and ratings on the U.S. economy.

Argus Research analyst Bill Selesky raised his 12-month price target on Tesla to $556 from $396 on Tuesday.

• Tesla recently announced it had achieved record production of 104,891 vehicles in 4Q19 and record deliveries of 112,000 vehicles, meeting a goal that the company had forecast at the beginning of last year. Total deliveries for 2019 of 367,500 were 50% higher than in 2018.

• We are raising our 2020 EPS estimate to $5.96 from $4.40 to reflect improved economies of scale in 2020 production and delivery results and a better-than-expected ramp up of vehicles produced at the Shanghai factory in China. The 2020 consensus estimate is $5.58.

• Our positive stance on the stock, which is up 40% over the past year versus 27% for the S&P 500, assumes ongoing revenue growth from the legacy Model S and Model X, as well as continued strong demand for the new Model 3. The recent (record) production and delivery performance for the fourth-quarter of 2019 highlight the popularity of the Model 3, which accounted for more than 80% of 4Q production.

• Despite the recent jump in the stock price, we continue to see significant upside for TSLA shares based on accelerating revenue trends and strong demand for the Model 3.

Shares of Tesla have roughly doubled in the past six months, making the electric vehicle company’s market cap similar to that of legacy automakers General Motors and Ford.

Among all analysts listed on FactSet, a firm named Elazar Advisors has the highest price target for Tesla at $734 per share.

Featured image: Patrick T. Fallon