Analysts Alex Potter and Winnie Dong from investment bank Piper Sandler released its latest research note regarding Tesla on Sunday, January 31, giving Elon Musk’s electric vehicle company a new $1,200 price target.
According to the report, the analysts write, “2020 was a breakout year for TSLA, but in our view, the fireworks aren’t over. Even after a 10x return over the past 12 months, we don’t think investors should be selling this stock.”
BREAKING: Piper Sandler analyst Alex Potter has raised his price target on $TSLA from $515 to a street high of $1,200.
He said: "In our view, the fireworks aren't over. Even after a 10x return over the past 12 months, we don't think investors should be selling this stock."
— Sawyer Merritt 📈🚀 (@SawyerMerritt) February 1, 2021
The over 100-page report (via @SawyerMerritt) was made to “defend our new price target of $1,200”, detailing updated assumptions from their 20-year discounted cash flow (DCF) model, which includes vehicle deliveries by Tesla model and region.
“While it is more exhaustive than anything we have published to date, even our expanded model does not capture all potential revenue streams. Indeed, with Tesla’s target industries still embracing outdated business models, it may be decades before this company runs out of new opportunities to pursue,” explains Piper Sandler.
Piper Sandler says Tesla will see 894,000 vehicle deliveries in 2021 based on their forecast model, with this number jumping over 9 million by 2030. Tesla will be seen as one of the top three automakers in the world, while Full Self-Driving (FSD) will see a “steady ramp” beginning in 2030. The forecast model estimates over half of Tesla owners purchasing the Autopilot package, helping to increase EBIT margins over 40%.
By the 2030s, Piper Sandler says Tesla Energy will take in 20-30% of the company’s revenue, an increase from the roughly 6% we see today.
Piper Sandler says these combined changes are behind the new price target increase from $515 up to $1,200.
Recently, other analysts have similarly increased their Tesla price targets to over $1,000. Oppenheimer doubled its price target to $1,036 earlier this month, while last week Argus Research upped its price target to $1,010.
