REUTERS: Shares of Tesla surged 10per cent to a record high on Monday, extending their rally to nearly 40per cent in five sessions after analysts raised their price targets on the electric car maker following its strong quarterly deliveries.
JMP Securities increased its price target to US$1,500 from US$1,050 after Tesla last Thursday reported higher-than-expected second-quarter vehicle deliveries, defying a trend of plummeting sales in the wider auto industry as the coronavirus pandemic slammed the global economy.
JPMorgan, which has an"underweight" rating on Tesla, raised its price target to US$295 from US$275, while Deutsche Bank upped its price target to US$1,000 from US$900. The median analyst price target for Tesla is US$675, compared with its current price of US$1,326, according to Refinitiv. Tesla's solid delivery numbers heightened expectations of a profitable second quarter, which would mark the first time in Tesla's history that it would report four consecutive quarters of profit.
However, with Tesla's stock up nearly 500per cent over the past year, many investors believe the rally is unsustainable. Tesla's stock is trading at 158 times expected earnings, according to Refinitiv, an exceptionally high valuation.
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