Tesla Inc. CEO Elon Musk dances onstage during a delivery event for Tesla's China-made Model 3 cars in Shanghai, China, January 7, 2020. (Photo: CGTN)
Shares of Tesla Inc. surged by 13 percent to a record high on Monday, extending their rally to over 40 percent in five sessions after analysts raised their price targets on the electric car maker following its strong quarterly deliveries.
The day's jump increased Tesla's stock market value by 30 billion U.S. dollars, eclipsing the entire value of Ford Motor Co., currently at 25 billion U.S. dollars.
JMP Securities increased its price target to 1,500 U.S. dollars from 1,050 U.S. dollars after Tesla on Thursday reported higher-than-expected second-quarter vehicle deliveries, defying plummeting sales in the wider auto industry as the coronavirus pandemic slammed the global economy.
"We believe that the question to be considered is not whether the stock is expensive on current valuation measures, but what the company's growth and competitive position signal about the stock's potential for the next several years," JMP Securities analyst Joseph Osha wrote in a client note. Tesla's annual sales could hit 100 billion U.S. dollars by 2025, he predicted.
JPMorgan, which rates Tesla "underweight," raised its price target to 295 U.S. dollars from 275 U.S. dollars, while Deutsche Bank upped its target to 1,000 U.S. dollars from 900 U.S. dollars. The median analyst price target for Tesla is 675 U.S. dollars, compared with its current price of 1,372 U.S. dollars, according to Refinitiv.
Tesla's solid delivery numbers heightened expectations of a profitable second quarter, which would mark the first time in Tesla's history that it would report four consecutive quarters of profit.
However, with Tesla's stock up nearly 500 percent over the past year, many investors believe the rally is unsustainable. The stock is trading at 158 times expected earnings, according to Refinitiv, an exceptionally high valuation.
Following Monday's surge, Tesla's market capitalization stood at 245 billion U.S. dollars, growing its lead as the world's most valuable automaker.