The Tesla Inc. rose to its all-time high on Thursday, boosted by one upgrade and hopes a ‘blue’ senate will be a ‘potential game changer’ for the Silicon Valley electric carmaker and other EV and alternative energy companies.
Tesla TSLA,
shares traded as high as $ 811.61, an intraday high, extending their winning streak to a 10th session, their longest since a 10-day stretch in April.
Analysts at RBC Capital, led by Joseph Spak, upgraded their rating on Tesla stock to their equivalent of hold, from sell, setting a price target of $ 700 from an earlier $ 339.
Also see: Tesla and other EV makers are reporting record sales and sending stocks to new highs
“There is no gracious way to say this, other than to say that we (Tesla’s) stock are completely wrong (even if our fundamental vision until now wasn’t too far off),” they said in a note Thursday. “But in the spirit of New Year’s resolutions and in light of our recent EV forecast through 2050, we are re-evaluating (Tesla’s) place in the industry, growth opportunities and cheap access to capital.”
Of the 37 analysts polled by FactSet, 12 rate Tesla stock as a buy, 14 rate it as a hold, and 11 rate it as a sale, with an average price target of $ 455.71, which is a downside of over 40 % implies.
“Our biggest mistake was how (Tesla) can take advantage of its stock price to raise cheap capital and fund capacity spending and growth,” said the RBC analysts. Traditional automakers “must generate significant money from existing operations to fund their transition to electrification,” and Tesla can also use the stock price to fund acquisitions, they said.
“Even a relatively large deal would be insignificant to (Tesla’s) market cap … In short, the higher stock price is somewhat self-fulfilling for (Tesla’s) growth potential,” the analysts said.
The boost for Tesla stock came amid strong gains for stocks of other EV and EV-related companies and alternative energy stocks in recent sessions as investors bet a Democrat-controlled Senate will prioritize clean energy policies.
Related: Sales of GM products fell for the year, but rebounded back to pre-pandemic levels in the fourth quarter
The iShares Global Clean Energy ETF ICLN is up nearly 20% this week and is up 190% in the past 12 months. American certificates from Nio Inc. NIO, a China-based EV maker, are up nearly 11% in the week and more than 1,500% in the last 12 months. For comparison: the S&P 500 index SPX,
is up 1.3% this week and about 18% in the last 12 months.
“A Blue Senate is very optimistic and a potential game changer for Tesla and the overall EV industry, with a more green-driven agenda now definitely on the agenda for years to come,” Wedbush analyst Dan Ives said in a Thursday. note. .
“We believe that a doubling of electric vehicle tax credits and further consumer incentives and government initiatives around the EV industry will be on the horizon, which is a big positive” for Tesla and General Motors Co. GM,
privately owned Rivian, Fisker Inc. FSR,
and other EV-related companies, he said.
Tesla was added to the S&P 500 index on December 21. The stock fell during that session and the next, but has since followed an upward trajectory. The stock is up more than 750% in the last 12 months, compared to a gain of about 18% for the S&P.