Stock in Tesla has hit a new all-time high in Friday trading. The stock’s recent run has been incredible. Now the question is how high can it go.
Tesla (ticker: TSLA) stock is at $906.50, up about 1.4%, in recent trading. The S&P 500 is up about 0.1%. The Dow Jones Industrial Average has added about 0.3%.
That’s a record for the electric-vehicle maker. Its old high-water mark was set on Jan. 25 at $900.40 a share, according to Dow Jones Market Data. On Thursday, Tesla closed at a record for the first time since Jan. 26.
Shares are up about 39% over the past three months, pushing the market cap to roughly $900 billion. (Tesla has about 1 billion shares outstanding, making the math easy.)
Bulls, naturally, see more gains ahead. Wedbush analyst Dan Ives believes Tesla raised his most bullish case for Tesla stock to $1,500 a share from $1,300 after Tesla reported better-than-expected earnings on Wednesday.
“Tesla is rising because earnings revisions are soaring,” points out Gary Black, managing partner of the Future Fund Active exchange-traded fund. Analyst estimates for Tesla’s 2022 earnings have risen to about $8 a share from $6 over the past few weeks. “Rising estimates drove Tesla to the moon in 2020. They will drive Tesla to $1,000-plus in 2022,” Black says.
Ives rates Tesla stock Buy, and Tesla is the largest position in Black’s fund.
Yes, there are still Tesla bears out there who believe the stock is overvalued. The bottom third of analyst price targets averages about $425, less than half of where the stock is trading.
Bears expect the sky-high valuation to give investors pause eventually. Stocks don’t usually fall just because investors, collectively, wake up one morning and feel differently about valuation. Something has to happen. The overall market could tumble, or the business could trip up. Analysts expect Tesla deliveries to grow from about 890,000 units in 2021 to 1.3 million in 2022. Any hiccup to growth would be a negative catalyst for shares.
Whether the stock rises or falls in the short run is anyone’s guess. Whatever happens, it will be fun to watch.
Write to Al Root at [email protected]
