The shares of Tesla Inc. reached an all-time high on Thursday, fueled by one upgrade and hopes a ‘blue’ Senate will be a ‘potential game changer’ for Silicon Valley electric car makers and other EV and alternative energy companies.
Tesla TSLA,
shares traded up to $ 811.61, an intraday high, extending their winning streak to a tenth session, the longest since a ten-day period in April.
Analysts at RBC Capital, led by Joseph Spak, raised their rating on Tesla shares to their equivalent of ownership, of sale, and set a price target of $ 700, up from a previous $ 339.
See also: Tesla and other EV manufacturers report record sales and send shares to new highs
“There is no graceful way to put it other than to say that our (Tesla’s) inventory is completely wrong (even if our fundamental view so far has not been too far),” they said in a note on Thursday. . “But in the spirit of New Year’s resolutions and in the light of our recent EV forecast for 2050, we are evaluating (Tesla)’s place in the industry, growth opportunities and cheap access to capital.”
Of the 37 analysts surveyed by FactSet, Tesla holds a rate of 12, 14 an investment and 11 a sale, with an average price target of $ 455.71, which means a disadvantage of more than 40% .
“Our biggest mistake was how (Tesla) could use its share price to raise cheap capital and finance capacity spending and growth,” RBC analysts said. Traditional carmakers ‘need to generate significant cash from existing operations to finance their transition to electrification’, and Tesla can also use the share price to finance acquisitions, they said.
“Even a relatively large transaction would be insignificant for (Tesla)’s market capitalization … To sum it up, the higher share price is somewhat self-evident for (Tesla)’s growth potential,” the analysts said.
The boost for Tesla shares was amid the sharp rise in shares of other EV and EV-related companies and alternative energy stocks in recent sessions, as investors bet a democratically controlled Senate will prioritize clean energy policies .
Related: GM sales fell for the year, but fell to pre-pandemic levels in the fourth quarter
The iShares Global Clean Energy ETF ICLN has gained nearly 20% and 190% over the past twelve months. US Depositary Receipts from Nio Inc. NIO, a China-based EV manufacturer, has risen nearly 11% this week and more than 1,500% in the last 12 months. For comparison, the S&P 500 index SPX,
has risen by 1.3% this week and by about 18% over the past 12 months.
“A blue senate is very positive and a potential ‘game changer’ for Tesla and the overall EV sector, with a more green driven agenda that will now definitely be on the map for the next few years,” said analyst Dan Ives of Wedbush, said in a note Thursday. .
“We believe that a doubling of EV tax credits and further incentives for consumers and government initiatives around the EV sector will be on the horizon, which is very positive” for Tesla as well as General Motors Co. GM,
privately owned 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 dropped in the next session, but has been on an upward trajectory ever since. The stock has risen more than 750% over the past 12 months, compared to the S&P profit of around 18%.