Tesla (NASDAQ:TSLA) recently received an “Outperform” rating and a new price target of $1,060 per share from JMP Securities. The Street has suggested that JMP’s positive forecast for TSLA may have given the electric car maker's shares a boost in Tuesday's trading.
The Wall Street firm also said that Tesla was growing at a compound annual rate of 23%, and is valued 20 times its forecasted earnings, based on 2021 estimates. JMP predicted that Tesla could make about 2 million vehicles a year by 2025.
“Interestingly enough, revisions to our 2021 model put us only moderately above consensus. But a look at the longer-term potential for TSLA’s growth suggests the stock should be more highly valued on the 2021 outlook than it currently is,” said JMP’s Joseph Osha.
To Tesmanian’s knowledge, JMP’s price target is second highest only to ARK Invest, which is headed by TSLA super bull Cathie Wood. The ARK Invest CEO set Tesla’s price target as high as $7,000 per share by 2024, which is dependent on the EV manufacturer’s success in autonomous vehicles.
TSLA investors were still happy to buy stocks from the company even at lower multiples, JMP reasoned when it was explaining its “Outperform” rating. The Tesla community on Twitter reflect JMP’s reasoning. Long-term Tesla investors see the current drop in prices as more of an opportunity rather than a deterrent.
“The recent market-driven pullback provides investors with a good opportunity to enter the stock in our opinion, and a perusal of offerings from competitors suggests that Tesla’s market position should continue to be dominant.
“Investors may find themselves with additional near-term opportunities to buy the stock as Tesla works through the first half of 2020, and the impact of COVID-19 becomes apparent,” said JMP’s Joseph Osha.
As of the writing, TSLA is trading at $772.73 per share, a 3.91% rise from Monday's $743.62 close.
According to NASDAQ, there is a “HOLD” consensus rating on TSLA with a score of 1.74. Overall, Tesla has 16 “SELL” ratings; 12 “HOLD” ratings; and 7 “BUY” ratings. The EV automaker has a consensus price target of $465.33.
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