Tesla could surge 48% in a bull-case scenario with more than 1 million car deliveries by 2022, Wedbush says
- Tesla could soar by 48% in a bull-case scenario with the company hitting 1 million vehicle deliveries by 2022, the Wedbush analyst Daniel Ives said in a recent client note.
- Ives said he expected strong demand from China to continue driving delivery growth for Tesla, and he estimated that "the China growth story" for Tesla was worth at least $100 per share.
- Tesla could approach 5 million deliveries annually by the end of the decade if the pace of global electric-vehicle demand continues, Ives said.
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A continued surge in Tesla's share price is possible in Wedbush's bull-case scenario, the analyst Daniel Ives said in a note on Thursday.
Ives increased his price target on Tesla to $950 from $715 and his bull-case-scenario price target to $1,250 from $1,000, representing potential upside of 12% and 48%.
Ives, who reiterated his "neutral" stance on Tesla, said he thought the electric-vehicle manufacturer would deliver 1 million cars in 2022 partly because of red-hot demand from Chinese consumers for not only Tesla's Model 3 but competing cars from Nio, Xpeng, Li Auto and others.
"We believe that the China growth story is worth at least $100 per share in a bull case to Tesla as this EV penetration is set to ramp significantly over the next 12 to 18 months, along with major battery innovations coming out of Giga 3," Ives said.
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And if the pace of global demand for electric vehicles continues, Tesla could deliver 5 million cars annually by the end of the decade, Ives said. The company delivered just under 500,000 vehicles in 2020.
President-elect Joe Biden's agenda could also support Tesla and other electric-vehicle manufacturers by including tax credits for people who buy efficient cars.
"We believe while the impact of a Biden Administration taking the reigns in January (and a Blue Senate) will have wide reaching ramifications across all sectors, in particular the focus on environmental issues and reducing the domestic carbon footprint could have a dramatic impact for EV vehicles in the near-term," Ives said.
Ives said his bull-case scenario was based on a 50x multiple on long-term earnings power of $25.
Shares of Tesla climbed 1.8% at intraday highs on Friday and were up 20% year-to-date through Thursday's close.
