Shares of Tesla Inc. rallied toward a record high Thursday, boosted by an upgrade, and expects a “blue” Senate to be a “potential game changer” for Silicon Valley electric car maker and other electric and power vehicle companies alternative.
Tesla TSLA,
shares traded up $ 811.61, an intraday high, extending its winning streak to a 10th session, the longest since a 10-day stretch in April.
Analysts at RBC Capital, led by Joseph Spak, raised their rating on Tesla shares to their retention equivalent, after the sale, and set a price target of $ 700, up from $ 339 previously.
See also: Tesla and other electric vehicle manufacturers report record sales, sending stocks to new highs
“There’s no other elegant way to say this than to say that we were completely wrong about (Tesla’s) actions (even if our fundamental vision so far wasn’t too far off,”) they said in a note Thursday. “But in the spirit of New Year’s resolutions and in light of our recent VE forecast for 2050, we are re-evaluating (Tesla’s) place in the industry, growth opportunities and economic access to capital “.
Of the 37 analysts surveyed by FactSet, 12 value Tesla for purchase, 14 value for retention and 11 for sale, with an average target price of $ 455.71, which implies a disadvantage of more than 40%.
“Our biggest flaw was how (Tesla) can take advantage of its stock price to raise capital economically and fund capacity spending and growth,” RBC analysts said. Traditional carmakers “need to generate significant cash from existing operations to fund their transition to electrification,” and Tesla can also use its stock price to fund acquisitions, they said.
“Even a relatively large deal would be negligible for the market capitalization of (Tesla) … In short, the higher stock price meets the growth potential of (Tesla),” analysts said .
The rise in Tesla shares came amid strong gains for shares of other VE and EV-related companies and alternative energy stocks in recent sessions, as investors bet that a Senate controlled by Democrats prioritize clean energy policies.
Related: GM sales fell during the year, but returned to pre-pandemic levels in the fourth quarter
The iShares Global Clean Energy ETL ICLN ETF has gained almost 20% this week and 190% in the last 12 months. Receipts from US deposits from Nio Inc. NIO, a China-based electric vehicle manufacturer, has risen nearly 11% in the week and more than 1,500% in the last twelve months. In comparison, the S&P 500 SPX index,
has gained 1.3% this week and about 18% in the last twelve months.
“A Blue Senate is very bullish and can‘ change the game ’potential for Tesla and the global EV sector, with a greener agenda now on the charts in the coming years,” Wedbush analyst Dan said Ives, on a note Thursday.
“We believe that electric vehicle tax credits and other consumer incentives and government initiatives around the electric vehicle sector will double, which is a big positive” for Tesla and General Motors Co. GM,
Private Rivian, Fisker Inc. FSR,
and other VE-related companies, he said.
Tesla was added to the S&P 500 index on December 21st. Shares fell in this session and the next, but since then it has been on an upward trajectory. Shares have gained more than 750% in the last twelve months, compared to S&P’s gains of about 18%.