Tesla bulls are rallying behind the automaker’s stock (TSLA) ahead of earnings with new record price targets from two analyst firms.
The company is set to release its earning result for Q1 2022 after market close later today.
Since the release of its Q1 2022 delivery results, several Wall Street analysts have been updating their price target on Tesla to adjust to the new record deliveries – both an all-time record and a strong record for the first quarter of the year.
Two firms are pushing this to another level with new record price targets.
Texas-based hedge fund Worm Capital believes that Tesla is about six years ahead of the competition (via Seeking Alpha):
Conventional Wall Street analysis consistently undervalues Tesla’s multiple business lines, its massive scale, its expanding margin profile, its leading revolution in complex manufacturing, its approach to real-world AI, its vertical integration, its software stack, and much more. Our multi-year research effort into Tesla’s manufacturing capabilities and supply chain integrations suggest that Tesla is more than 6 years ahead of any competitor. This lead is expanding.
The firm believes that Tesla’s stock could increase by a factor of 10 this decade:
We believe Tesla (TSLA) shares could offer a 10x return by 2030 – and potentially much more.
Worm Capital’s expectations are even higher than longtime Tesla uber-bull ARK Invest.
This week, the firm updated its price target on Tesla to $4,600 by 2026. The most aggressive target of all major firms.
Yet, they claim it to be conservative:
Although tuned to our expectations for 2026, we believe our Tesla model is methodologically conservative: we assume that Tesla’s stock will trade like a mature company rather than a high-growth one in 2026. Using the existing assumptions in our model and extending them to 2027 results in a materially higher price target and compounded annual rate of return.
Ark also has a $5,800 bull case price target.
While they claim the target to be conservative, it does rely on Tesla delivering on some longtime goals that have been delayed, like “full self-driving” and the Cybertruck.
At $5,000 a share, it would value Tesla at over $5 trillion.
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Author: Fred Lambert