Tesla’s (TSLA) latest quarterly results, which embody a fifth straight quarter of GAAP profitability, have prompted Avenue value goal will increase and renewed hypothesis over an eventual inclusion within the S&P 500 (^GSPC).
“We expect at this level, the S&P 500 index committee is tough pressed to not add the inventory to the index, which is the near-term catalyst, and one of many primary explanation why we have reiterated our Purchase score and raised our value goal by $50 to $550,” Garrett Nelson, analyst at CFRA, advised Yahoo Finance’s the First Commerce.
With the presidential election across the nook, Nelson factors to a different potential upside — the implications of a Biden win for the electrical car maker.
“In our view, Tesla could be one of many greatest winners as an electrical car pure play, as a result of EVs could be very closely backed below a Biden administration,” mentioned Nelson.
“In the event you have a look at what [Biden’s] proposing — an enormous growth of tax credit and in addition an enormous build-out of EV charging stations,” mentioned Nelson. “So that you’re a few 20-fold enhance within the variety of EV charging stations, which might actually assist the electrical autos within the adoption.”
Nelson says the Tesla’s pipeline of upcoming autos seems to be very sturdy within the coming years, together with the Cybertruck, which is scheduled to enter manufacturing subsequent 12 months.
“The pickup truck section is so sturdy in the US that we expect it’ll have some enchantment past the area of interest product. The gross sales, I believe, will shock to the upside,” mentioned Nelson.
The analyst additionally famous the corporate’s elevated manufacturing capability.
“Tesla very quietly elevated their annual manufacturing capability, from 690,000 autos a 12 months to 840,000 autos a 12 months versus three months earlier. In order that’s a 22% enhance of their manufacturing capability between the Fremont manufacturing facility in California, and the China manufacturing facility. So it’s a giant enhance,” mentioned Nelson.
Tesla reaffirmed its purpose to hit a half-million car deliveries this 12 months. The inventory was buying and selling up greater than 2% throughout Thursday’s afternoon session.
Ines covers the U.S. inventory market. Observe her on Twitter at @ines_ferre