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Tesla Inc. stock rallied to an all-time high on Thursday, boosted by an upgrade, and hopes a “blue” Senate will be a “potential game changer” for the Silicon Valley electric car maker and other electric vehicle and alternative energy companies.
Tesla TSLA,
The 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.
RBC Capital analysts, led by Joseph Spak, raised their rating on Tesla shares to their own hold, sell equivalent, and set a price target of $ 700, from $ 339 previously.
See also: Tesla and other electric vehicle makers report record sales, propelling inventories to new heights
“There is no gracious way of saying this other than to say that we have the title (of Tesla) completely wrong (even though our core vision so far was not too far removed),” 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 reassessing (Tesla’s) place in the industry, growth opportunities and inexpensive access to capital. “
Of the 37 analysts polled by FactSet, 12 rate Tesla stock as a buy, 14 a hold and 11 a sell, with an average price target of $ 455.71, which implies a drop of more than 40%.
“Our biggest failure was how (Tesla) could take advantage of its share price to raise capital at low cost and fund capacity spending and growth,” RBC analysts said. Traditional automakers “need to generate significant cash from existing operations to fund their transition to electrification,” and Tesla can also use its stock price to fund acquisitions, they said.
“Even a relatively large transaction would be insignificant for (Tesla’s) market capitalization… To sum up, the higher share price is somewhat self-fulfilling for (Tesla’s) growth potential,” analysts said.
The boost for Tesla shares came amid big gains for shares 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: GM’s sales fell for the year, but rebounded to pre-pandemic levels in the fourth quarter
IShares Global Clean Energy’s ICLN ETF has gained almost 20% this week and 190% in the past 12 months. U.S. certificates of deposit for Nio Inc. NIO, a China-based EV maker, rose nearly 11% in the week and over 1,500% in the past 12 months. In comparison, the S&P 500 SPX index,
gained 1.3% this week and around 18% in the past 12 months.
“A Blue Senate is very optimistic and could ‘be a game changer’ for Tesla and the entire EV industry, with a greener agenda now certainly in the cards for the next few years,” Wedbush analyst Dan said. Ives in a note Thursday. .
“We believe that a doubling of electric vehicle tax credits and other consumer incentives and government initiatives in the electric vehicle sector will be on the horizon, which is a big plus” for Tesla and General Motors Co. GM,
private company 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 has gained over 750% in the past 12 months, compared to gains of around 18% for the S&P.
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