Tesla (TSLA) has just been given another price target increase from Wall Street analyst Alex Potter, as reported by Barron’s. The Piper Sandler analyst raised his price target from $515 from $480 a share, citing energy storage, increasing battery capacity, and, oddly, CEO Elon Musk’s compensation package as reasons the company would be successful.
Musk’s compensation is unique compared to most CEOs. Instead of receiving a salary, Musk offers himself a complex “options” package, in which he receives these options based on Tesla’s increasing market value. Currently, Musk receives 8 million options with a strike price of $70 for every $50 billion increase in Tesla’s market value.
BREAKING: Piper Sandler analyst Alex Potter has increased his price target on Tesla stock from $480 per share to $515 per share while maintaining an overweight rating on the stock.
— Sawyer Merritt 📈🚀 (@SawyerMerritt) September 17, 2020
In his report, Potter writes, “Elon Musk is compensated in an unorthodox way.” He continues, “Instead of a salary, he receives an options package that, in all likelihood, will eventually make him the world’s wealthiest person.”
Potter also predicts a significant fall in stock-option expenses, which will ultimately turn into positive earnings. The new target price, prior to the 5-for-1 stock split, would have equated to $2,575 in stock. However, since the split, shares are up over 60%, and it’s only been a little over a month.
Tesla also got another price target increase, as Wedbush analyst Dan Ives told investors on a note Thursday of a new target of $475, based on signs of “robust and stronger-than-expected” demand in China, specifically for Model 3.
At the time of writing, Tesla’s stock is worth $440.79, up 4.10% from yesterday.
Zach is a writer, musician, and EV enthusiast, currently residing in Santa Rosa, Ca. Loves his wife, his cat Banks, and a good cup of coffee.