- Daniel Ives of Wedbush increased his price target for Tesla on Thursday to $370 from $270, saying that the company looks to be on an "upward trajectory."
- Shares of the automaker rose more than 1% Thursday, continuing a week of gains for the company.
- "We move one step closer to believing this Tesla turnaround story is real as Musk has delivered with Tesla's back against the wall," Ives wrote in a Thursday note to clients.
- Watch Tesla trade live on Markets Insider.
Tesla shares rose more than 1% Thursday, marking another day of gains after Daniel Ives of Wedbush boosted his price target to $370 from $270.
"We move one step closer to believing this Tesla turnaround story is real as Musk has delivered with Tesla's back against the wall," Ives wrote in a Thursday note to clients.
While Ives isn't completely sold on the turnaround story yet, he wrote that recent data points from Europe and China are positive and led him to raise his target price by $100. His target price is still roughly 13% lower than where Tesla shares closed Tuesday, and he reaffirmed his neutral rating on the stock.
Tesla has "proven the skeptics" wrong in the near term with "strong Model 3 consumer demand and profitability that looks to be on an upward trajectory for 4Q," he wrote.
The company could comfortably hit its vehicle delivery guidance of between 360,000 and 400,000 units for full year 2019, according to Ives. That's a year over year increase of 45% to 65%. If Tesla can sustain its current level of profitability and demand, the stock "will open up a new chapter of growth and multiple expansion," Ives wrote.
Going forward, Tesla's future growth is heavily dependent on China, and so the Giga 3 ramp and demand in the region will be "front and center" for investors over the next 12 to 18 months, Ives wrote.
He continued, saying that 2020 is a pivotal year for the company "as ultimately this will be the year the bulls have been waiting for with China coming on board and Musk's grand EV vision starts to take hold......or hits another stumble and the bears will come quickly out of hibernation mode heading into next year with the stock at new highs."
While there have been some solid data points from Tesla as of late, Ives wrote that investors have been "snake bitten" by the stock in the past "as every time optimism grows and it looks like bright skies over Fremont unfortunately some negative variable" comes out of left field and "creates an overhang on the story."
And, Tesla's debt load remains "an albatross around Fremont's neck," and strong cash flow and profitability is needed to fund "Musk's myriad of initiatives" that includes robotaxis, Giga 3, and insurance initiatives, Ives wrote.
The note comes after a Tesla rally that's sent the stock surging past $420, the price at which CEO Elon Musk tweeted he had funding secured to take the company private in 2018. As the stock soars, traders that have bet against Tesla have lost more than $8 billion.
Tesla is up roughly 28% year-to-date through Tuesday's close.
