S&P 500   4,701.21
DOW   35,754.75
QQQ   399.61
S&P 500   4,701.21
DOW   35,754.75
QQQ   399.61
S&P 500   4,701.21
DOW   35,754.75
QQQ   399.61
S&P 500   4,701.21
DOW   35,754.75
QQQ   399.61

New Street-High Price Target for Tesla (NASDAQ:TSLA)

Wednesday, January 6, 2021 | Steve Anderson
New Street-High Price Target for Tesla (NASDAQ:TSLA)

If 2020 was Tesla's (NASDAQ:TSLA) big year, it's beginning to look like 2021's arrival won't short-circuit the company's ambitions that much farther. New reports suggest an analyst has a new Street-high price target on the company, backed up by a range of solid reasons. What's more, the rest of the analyst pool is looking positively at Tesla too, and that should make investors take even more notice of what's likely to be the leader in electric vehicles.

The Bar Keeps Getting Raised

The recent rating hike came from Morgan Stanley, who boosted its price target to $810 per share, the highest Wall Street currently has on the company. It didn't shift its rating around any—the company is still considered “overweight”, which is essentially the equivalent of “buy”—but the rating is still encouraging as it sits.

Morgan Stanley ramped up its price target primarily on the strength of one key item: word about deliveries. Fourth quarter delivery counts were better than most expected, and while Tesla itself was hoping to clear half a million total delivered vehicles this year, the fact that it didn't get there was likely galling. The fact that the company missed its half-million goal by just 450 vehicles, however, likely took a lot of the sting out of that failure. It only managed to deliver 499,550 vehicles total, reports noted.

Not Every Analyst is So Upbeat

Despite the clear improvement in Morgan Stanley's perceptions, our latest research finds that the broader analyst pool isn't quite so enthusiastic about Tesla's chances going forward. The company currently holds a consensus rating of “hold”, with 13 “sell” ratings, 11 “hold” ratings and eight “buy” ratings making that consensus up. The consensus right now is actually at its lowest point in six months; six months ago, the company held 11 “sell” ratings, 14 “hold” ratings and nine “buy” ratings. The consensus is also declined from last month, where there were 11 “sell” ratings, 10 “hold”, 10 “buy” and even one “strong buy,” which has since departed the roster.

Meanwhile, the consensus price target no longer reflects reality. Currently it's sitting at $311.75, and given that the stock currently trades at $760.40, the price target has been left so far behind it's like watching a Tesla race a horse and buggy. It's also one of just two price targets that is even close to Tesla's current level; the other right now is at JMP Securities, who has a $788 price target on the company.

A Function of Value?

There's no doubt that a Tesla share is a pricey item right now, and it was even before now; remember, Tesla shares had launched a five-for-one stock split back in August, when it was running around $2,000 per share. There are even some stirrings right now to suggest that Tesla may be considering yet another stock split, which is downright amazing in its own right.

Whether or not that happens is a matter mostly for speculation. It could, but even if it doesn't, Tesla has still had an amazing year, and this in the midst of the worst pandemic in modern history. However, it's also clear that Tesla has never had so many competing firms looking to take bites out of its market share. Easily one of the most distressing items to a Tesla investor is word that Apple (NASDAQ:AAPL) is looking to enter the electric vehicle market. With Apple's walled garden of devoted users—and a Venn diagram of Tesla owners and  Apple enthusiasts will likely have a lot of overlap—that's a potentially big chunk of Tesla's market potentially gone if Apple brings out a car said users would like. Moreover, we've got names ranging from Ford (NYSE:F) to Nio (NYSE:NIO) involved in the field, all looking to take chunks out of the market that was formerly mostly Tesla and a few also-rans.

Tesla seems to have first-mover advantage on any wide scale, and has taken advantage accordingly. The competition in this field will be continually playing catch-up on one end or another, and only some of them will truly be able to compete. Yes, Apple would have a lock on some of the field, and has cash enough to build out accordingly. Surely Ford would draw with name recognition and ability to offer lower-cost goods since most of its infrastructure is already established, needing only to be re-tooled for the different kind of vehicle. Still, Tesla has already provided vehicles, and has built a reputation accordingly that will be hard to unseat. For investors, that should be some of the best news of all.

Tesla is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.

Should you invest $1,000 in Tesla right now?

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Tesla (TSLA)2.2$1,068.96+1.6%N/A345.94Hold$798.24
Ford Motor (F)2.7$19.81-0.8%2.02%28.30Hold$17.06
NIO (NIO)2.0$35.05+5.8%N/A-35.40Buy$65.90
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