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Demand for electric cars has grown slowly. But the tsunami is coming

Tesla goes up. Is it too late for investors to enter?

Maybe not.

If it maintains the pace of the increase in the first week, Tesla’s stock will match all of the last year’s gains by mid-March. Not that anyone expects another 700% increase in stocks this year. Or even a tenth of that.

In fact, even some of the most bullish analysts only expect Tesla shares to reach $ 1,000 by the end of the year, a 14% increase for the rest of 2021 from Friday’s high.

Many analysts who have relatively positive outlooks for the company have 12-month price targets well below Friday’s close of $ 880. Analysts’ current average target price is $ 440, which is a 50% drop in stocks.

Of the 35 analysts who follow stocks, 13 have a “strong buy” or “buy” recommendation, and 11 others have a neutral or comment recommendation. Of the rest, seven have a sell recommendation, and only four are a ‘strong sell’.

Adam Jonas of Morgan Stanley is one of the bullish analysts with a bearish target price. Being one of the best auto analyzes on Wall Street, Jonas upgraded his recommendation on Tesla to “overweight” in late November, but was quick to continue raising its target price before the market price.

On November 18, when he upgraded the stock, he set a target price of $ 540, which was a 22% rise from where the shares stood at that point. Last Wednesday, he pushed it down to $ 810, only to see Tesla shares quickly cross that mark as well.

What makes Tesla stocks so difficult to predict is that investors don’t price them based on how the company is doing right now. If they are, a company just has it 500,000 cars sales last year Its value would hardly be more than the combined value of the world’s 10 most expensive automakers, which together account for the vast majority of the global annual auto sales of close to 75 million.

Instead, they are betting that Tesla can continue to grow rapidly, capturing a large share of the world’s growing appetite for electric cars, or electric vehicles. There are forecasts that predict that in 10 to 20 years, Tesla could become the world’s number one automaker, not only in electric cars, but of any type of car.

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Dan Ives, technical analyst at Wedbush Securities, has a base case target price of $ 715 for Tesla stocks, and a bull case target of $ 1,000. His recommendation to buy on Tesla is based on his belief that Tesla will continue its strong run.

“I think it could be one million cars [delivered annually] By 2022. And looking to the north from 3 to 4 million as we go to 2025-26, with 40% of that growth coming from China, “he said. We think if you look in the next 10 to 15 years, you can start looking at 10-12 million cars a year. ”Volkswagen, the current global company, sold 11 million cars in 2019.

That’s it, of course. What is indisputable, however, is that Tesla stock has consistently proved analysts wrong over the course of the race that started 15 months ago.

On October 23, 2019, before Tesla reported on Strong sales and profits Which began to erase Wall Street’s doubts about the stock, stocks closed at $ 50.94 when adjusted for a subsequent stock split. They jumped 18% the next day, and sprinted, and their total has increased to 1628% since then.

It was a spike that analysts had never expected. The average target price in October 2019 was only around $ 50 at the time, revised for split. The 12-month target price a year ago was $ 62.

From here, Ives points to some of the most successful tech stocks in the world and says that Tesla is now standing at the same point as those companies did at turning points in their history.

“If you are a major electric vehicle insurer, we are still in the early days of the market,” he said. “I’ll just compare it to what I’ve seen from an Apple (AAPL) IPhone launch And the Netflix (NFLX) Exit the broadcast service and Amazon (AMZN) Come out with Prime “.