Piper Sandler raises target price for Tesla shares to $553

Piper Sandler raises target price for Tesla shares to $553

Piper Sandler Companies is a leading investment bank and institutional securities firm driven to help clients Realize the Power of Partnership. Founded in 1895, the firm is headquartered in Minneapolis with more than 50 offices across the U.S. and in London, Aberdeen and Hong Kong.

Analysts at Piper Sandler Companies say Tesla’s stock is currently undervalued. Therefore, they increased their target price by more than 30%. Previously, their target price was $423, and now $553. On Thursday, trading closed at $481.34, which means that the price of shares has doubled over the past 3 months and have risen 109% over the past six months.

Tesla was fulfill the declared number of deliveries in 2019. The company also has great potential in the Chinese market. Gigafactory 3 was built and put into operation in less than 1 year. The first customers were already get their made in China Model 3.

Piper Sandler estimates that next year, Tesla's sales in China will double to 225,000 cars from 112,000 in 2020.

Piper analysts led by Alexander Potter said in the Jan. 9 note:

“Bottom line: if Tesla's Model 3 market share in the United States can be replicated in China - and if this logic extends also to Model Y - then Tesla's annual volume in China alone would eventually exceed 650k units.” 

Potter is upbeat on Tesla’s growth route. According to a MarketWatch report, in December, he acknowledged the company’s loyal customer base. Potter was also impressed with the company’s capabilities, which included “high-volume manufacturing, impressive opex control, and frugal capital spending.”

Notably, Potter has high hopes for Tesla’s Cybertruck. He thinks that the company can sell about 200,000 units of Cybertruck by 2023. He thinks that Cybertruck is far better than other pickup trucks in the market.

Shanghai Gigafactory is the first Tesla's factory outside the United States and the first factory in China, which is completely owned by foreigners. This project is supported by political leaders of Shanghai, and Chinese banks willingly give loans to Tesla. This is evidence that China believes in the strength and potential of the American automaker.

Tesla CEO Elon Musk, Li Qian and secretary of the Shanghai Municipal Party Committee/photo by Chen Zhenbao, Zhang Chunhai, Chen Mengjie

Tesla's cooperation with China promises to be exciting. At a ceremony to mark the anniversary of Gigafactory 3, Tesla CEO Elon Musk announced new plans in China. The company intends to expand its subsidiary in China.

Tesla CEO Elon Musk and Li Qian, secretary of the Shanghai Municipal Party Committee/photo by Chen Zhenbao, Zhang Chunhai, Chen Mengjie

Musk said Tesla intends to make significant investments in China to build Model 3, Model Y and other future electric cars there. This means that Tesla has high hopes for China.

“We intend to continue making a significant investment and increasing the investment in China, making the Model 3 and the Model Y and future models also in China.”

He also announced that Tesla plans to create its own design and engineering center in China, where company will create a car for the whole world. Musk said:

“Something that would be super cool ... so we’re going to do it ... is to try to create a China design and engineering center to actually design an original car in China for worldwide consumption. I think this will be very exciting.”

According to Musk, some of the best works of art in the world have been created in China, so he believes that his project, created in China, will also be popular around the world. The car will have the same unexpected design as the recently introduced Cybertruck. The Chinese have always been distinguished by originality, speed and intelligence, which is why China is a great place to develop, create and implement the most original and unexpected solutions.

Musk said that every time he comes to China and Shanghai, he can fully experience the rapid development and enthusiasm of this land. Thanks to the effective collaboration of both teams, Shanghai Gigafactory has achieved amazing construction speeds. Tesla will continue to take root in Shanghai and deepen in China, strive to improve the technical level of new energy vehicles and new energy products, and continue to focus on creating good products to better meet customer needs.

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About the Author

Eva Fox

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.

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