Garrett Nelson, an analyst with CFRA believes Tesla Inc. Stock’s record-setting has finally come to and end.
Tesla has been the No. 1 U.S. auto maker in terms of market value off and on in the recent past, but it is the first time its market capitalization has topped Ford’s at its peak valuation. Ford is currently valued at around $36 billion, and GM at about $50 billion.
Tesla shares lost 2.2% to end at $481.34 on Thursday amid gains for U.S. equities overall. The stock ended at a record $492.14 on Wednesday, the latest in a string of high-water marks going back to mid-December. It was off 0.5% on Friday, but holding on to weekly gains around 8%.
“In our view, (Tesla) shares now appear fully valued after a meteoric run-up since bottoming at $177/share last June and are not reflecting various near-term risks,” said Garrett Nelson, an analyst with CFRA, in a note Thursday.
“We also see heightened risk of equity issuance, which would help de-risk the balance sheet but be dilutive to EPS,” he said. “With (Tesla’s) market cap now exceeding General Motors Co. GM, -1.23% and Ford Motor Co. F, -0.11% combined despite having only about 3% of joint vehicle sales volume, we think investors have given (Tesla) plenty of credit for future growth, raising execution risk,” he said. – MarketWatch
Piper boosts Tesla target to $553 from $423 after analyzing China potential
Piper Sandler analyst Alexander Potter raised his price target for Tesla to $553 from $423 after analyzing the company’s potential in China. The shares closed Thursday down $10.80 to $481.34. 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 650,000 units, Potter tells investors in a research note. The analyst says that while he’s not sure Tesla can immediately replicate its U.S. success in China due to the strength of German brands in China, he’s increasing his estimates nonetheless. He now expects China deliveries of 112,000 in 2020, 225,000 in 2021, and 399,000 in 2022. Potter keeps an Overweight rating on Tesla shares. Thefly