Tesla shares rose 3.04% at premarket trading on Monday after Oppenheimer analyst Colin Rush raised the stock price target.
Rush almost doubled the current target price for Tesla, which he set at the end of October at $385 per share, to $612 per share. He claims the company has reached a “critical scale” to support sustainable free cash flows. He also suggests that a company could also pose an “existential threat” to transport companies that have no ambition or ability to innovate at the fast pace of Tesla.
Analyst believes Tesla has "key advantages" over its competitors in powertrain design and battery technology, ADAS fleet size, roadmap to energy independence and consumer enthusiasm.
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"We believe Tesla's powertrain technology, power/data architecture, and operating system are tracking ~ three years ahead of competition based on available vehicles and checks on new platforms," Rusch said. "Given the resolution of manufacturing bottlenecks and demonstration of strong consumer demand, we believe TSLA is becoming a must-own stock and could benefit from inclusion in additional indexes."
"We believe the company risk tolerance, ability to implement learnings from past errors, and larger ambition than peers are beginning to pose an existential threat to transportation companies that are unable or unwilling to innovate at a faster pace," Rusch wrote in a note to clients.
Rusch's new price target is the second highest of the 32 analysts surveyed by FactSet, behind just Elazar Advisors analyst Chaim Seigel's $734 target.
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Eva Fox
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.
