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What happened
Actions of You’re here (NASDAQ: TSLA) appeared Thursday, increasing about 5% as of 2 p.m. EST.
The stock’s gain follows Goldman Sachs analyst Mark Delaney’s decision to increase his 12-month price target for Tesla stock from $ 455 to $ 780.
Model Y. Image source: Tesla.
So what
Delaney’s bullish price target of $ 780 is considerably higher than his previous target of $ 455. Even more, the target represents more than 30% of gain compared to its current level.
Supporting his buy rating for the growth stock, Delaney says he believes Tesla is taking shares in incumbent automakers faster than he expected. Further, Delaney estimates that electric vehicles will account for 29% of global vehicle sales by 2035, highlighting a massive tailwind for Tesla.
The analyst also predicts a shift in the sales mix towards Tesla’s new Model Y and its driver assistance software, helping the company’s profit margins grow over time.
Now what
Tesla moved forward at full speed in 2020, launching the Model Y in March and opening new factories in Berlin and Texas. Even more, the electric car maker has expanded its production capacity to Shanghai and California.
Investors, of course, should be wary of Tesla’s costly valuation. The company will have to execute with near perfect precision in the years to come to justify the current price of the title.
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