Electric car maker Tesla (TSLA)’s stock price has just received a significant price target hike from leading analysts at Jefferies Financial Group (JEF).
Analyst Philippe Huchois raised his price target on TSLA stock to $300, up 54% from $195. However, despite the big rally, Fouchois maintained his rating on Tesla stock at “hold.” Even more unusually, he suggested in a note to clients that Tesla would take advantage of the current post-election stock rally to increase its stake.
To raise equity, Tesla would need to issue more stock, which is generally frowned upon by analysts and investors because it would dilute the value of existing shareholders. However, Fouchois points out that about half of Tesla’s current $26 billion net cash position includes capital raised last in 2020.
Take advantage of the TSLA stock price rise
“In the current environment, equity raisings will likely occur ‘on the market’ as in 2020,” Uschova said in a note, adding that “investment needs and competition will intensify across multiple lines of business. “In…” it would give Tesla an advantage.
Tesla stock has risen about 25% since Donald Trump won the U.S. presidential election on Nov. 5. This rise brought Tesla’s market capitalization to $1 trillion. But Tesla’s stock price, at $313 per share, is now above most analysts’ price targets, including Mr. Fouchois’s target, which has been revised upward.
Although TSLA stock could fall from its current levels, Uchova still expects the stock to rise over the long term, saying, “Assuming the market remains competitive, deregulation could lead to a growth trajectory for Tesla stock. “will increase,” he said in the memo.
Is TSLA stock a buy?
Tesla stock currently has a consensus Hold rating among 35 Wall Street analysts. This rating is based on 11 Buy, 16 Hold, and 8 Sell recommendations made over the past three months. TSLA’s average price target of $207.83 implies a downside risk of 33.43% from current levels.
Read more about analyst ratings on TSLA Stock
