There’s a new most-bullish analyst on Tesla Inc. on Wednesday, and his name is Colin Rusch.
Oppenheimer’s Rusch more than doubled his price target on the electric vehicle maker’s stock
to $1,036 from $486. The new target is the highest of the 37 analysts surveyed by FactSet, and is nearly double the average target of $542.60.
He said the valuation supporting his new price target is based on high-growth equities enjoying multiple expansion, “as investors engage in price discovery related to inflationary pressures from stimulus measures.”
The stock rose 1.2% in premarket trading. It closed Tuesday 4.0% below the Jan. 8 record close of $880.02.
Rusch reiterated the outperform rating he’s had on Tesla since at least August 2018. Wedbush analyst Dan Ives, who now has the second-highest target at $950, is neutral on Tesla.
Rusch said he believes Tesla investors are grappling with what to do with the stock, which has doubled over the past three months. While he sees risks that Tesla hasn’t embraced Lidar (light detection and ranging), he believes bulls are betting on Tesla leading commercialization of autonomous vehicles technology. Read more about Lidar.
“While we continue to have misgivings about risks related to [Tesla] not incorporating Lidar into its vehicles yet, we believe the learning cycles enabled by having over 1 million vehicles on the road is an extraordinary advantage,” Rusch wrote in a note to clients.
He also believes Tesla’s efforts in simplifying manufacturing “have seen significant success and will continue, especially with volumes scaling,” which should provide a catalyst given the higher level of China-based and Model S and Model X sales.
Tesla’s stock has run up 100.2% over the past three months through Tuesday, while the S&P 500 index
has gained 10.3%.