Tesla stock price target gets a 28% boost at Wedbush, but not enough to recommend buying

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Tesla Inc. got a nice endorsement from prolific Wedbush analyst Dan Ives, who said the China demand story was playing out, but that still wasn’t enough to get him to recommend buying the electric vehicle maker’s stock.

Ives raised his “base-case” stock price target to by 27.7%, to $715 from $560. The new target was just 2.9% above Friday’s record close of $695.00. He reiterated his “bull case” price target of $1,000, which implies a 43.9% gain from Friday’s close.

“Heading into year-end 2021, we are seeing a major inflection of EV demand globally with our expectations that EV vehicles ramp from ~3% of total auto sales today to 10% by 2025,” Ives wrote in a note to clients. “We believe this demand dynamic will disproportionately benefit the clear EV category leader Tesla over the next few years, especially in the key China region, which we believe could represent ~40% of its EV deliveries by 2022 given the current brisk pace of sales.”

However, Ives kept his rating on Tesla
TSLA,
+5.96%

at neutral, which he’s had on the stock since April 2019.

“Clearly, competition is increasing across the board on the EV front with a slew of domestic players in China, Europe and the U.S. going after Tesla’s core EV stronghold, although we believe the market is growing at a brisk rate that will yield multiple winners going after the EV jackpot,” Ives wrote.

The stock fell 4.0% in premarket trading Monday, after rallying 11.6% the past two days to close Friday at a record $695.00. The stock is entering the S&P 500 index
SPX,
-0.35%

when the opening bell rings.

Keep in mind, a “neutral” rating for Wedbush means the expected total return of the stock will be in line with the median total return of all of the companies the analyst covers. And Ives covers the stocks of some high-profile companies that have outperformed the broader stock market this year, including Apple Inc.
AAPL,
-1.59%
,
DocuSign Inc.
DOCU,
-2.43%
,
Salesforce.com
CRM,
+0.67%
,
Uber Technologies Inc.
UBER,
-0.02%

and Zscaler Inc.
ZS,
+4.32%

Tesla’s stock has soared 730.7% year to date through Friday, while the S&P 500 has advanced 14.8%. In comparison, DocuSign’s stock has run up 225.2% this year and Zscaler shares have soared 321.3%.



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