Tesla Inc. TSLA Shares,
They rose more than 4% in pre-market trading on Tuesday after Piper Sandler analyst Alexander Potter raised his stock price target to $ 2,322 from $ 939, writing “faster-than-expected stock earnings “and great opportunities in software. Although Tesla shares have shot up almost 260% on the year and the stock’s valuation is 88 times higher than after its initial 2010 public offering, Potter said “flatly” his conclusion is to keep the shares. “While deliveries are a key driver of our higher short-term estimates, software is the biggest driver of our DCF-based target price increase,” he wrote in a note to customers Monday. “Tesla has noted the possibility of gross margins of more than 30% if / when more customers choose to purchase the company’s autonomous driving software (FSD).” That could help Tesla record operating margins in the mid-1920s by the end of Potter’s 20-year forecast period, even if only half of customers opt for full autonomous driving software. “Thanks to the high-margin nature of the FSD package, we believe that by the 2030s, Tesla could possibly be selling vehicles at cost, or even below cost, while achieving higher operating margins,” he wrote. Tesla shares have increased 60% in the past month alone as S&P 500 SPX,
has added about 4%.
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