On Monday, one of the more bearish Tesla Inc. (NASDAQ: TSLA) analysts flipped bullish, and more than doubled their 12-month price target. Canaccord Genuity raised its target from $419 to $1,071 and raised its rating from hold to buy making it have the second-highest price target on the street.
Tesla currently has 37 analysts covering the company with a weighted 12-month price target of $651.26. This is up slightly from last month, which was $634.33. Nine analysts have strong buy ratings, while six analysts have buy ratings. The majority, twelve analysts have hold ratings while six and four analysts have sell and strong sell ratings respectively. The street high comes from Piper Sandler with a $1,200 price target.
Jed Dorsheimer, Canaccord’s analyst, says that this new price target is based on 63 times their 2024 EV/EBITDA multiple, a whole 300% higher than the peer group. He concedes that this premium is very high but writes, “we also believe Tesla holds a several-year lead and is now expanding aggressively into storage and thus feel our multiple is warranted.”
The main reason as to why the large price target jump and rating change is due to Canaccord’s focus shifting to the energy storage business and an “Apple-Esque brand and ecosystem of energy products.” Dorsheimer believes that Tesla has the ability to change the battery market with its focus on first-principle engineering. He adds that Tesla and its cult followers are actually early adopters in the innovation curve, while the other OEM’s who are trying to buy into the EV space is the late majority.
Dorsheimer believes that Tesla’s battery supply constraints, “will alleviate starting in 2022 enabling energy generation and storage business to accelerate to $8B in revenue by 2025.”
Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.