- Wedbush Securities raised its price target for Tesla stock to among the highest on Wall Street.
- The analysts are optimistic about an imminent “green tidal wave” from President Biden’s infrastructure bill.
- Wedbush is now eyeing $1,400 for shares of the electric vehicle maker, 27% higher than its earlier base case of $1,100.
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Wedbush Securities raised its price target for Tesla stock to among the highest on Wall Street, citing an imminent “green tidal wave” from President Joe Biden’s newly-passed infrastructure package.
The investment firm is now eyeing $1,400 for shares of the electric vehicle maker, 27% higher than its original base case of $1,100 as well as Thursday’s closing price. Wedbush analysts Dan Ives and John Katsingris kept their bull case price target at $1,800 and maintained an outperform rating. Shares were up 0.34% to $1,100.09 in premarket trading Friday.
“The Street is continuing to digest the massive transformation coming to the auto industry around the EV revolution in 2022 and beyond as this green tidal wave will result in a $5 trillion market opportunity over the next decade with Tesla leading the way,” the analysts said.
Biden’s $1 trillion legislation is aimed at restoring American transportation systems, fighting climate change, and increasing access to high-speed internet service. It is also intended to boosting the EV industry. For instance, $7.5 billion is allotted to create a network of electric vehicle chargers across the US.
However, it is not just Tesla that stands to benefit from this law, Wedbush said. “Traditional stalwarts such as GM, Ford, VW, and EV-focused vendors such as Lucid, Rivian, Fisker and others going after massive consumers dollars up for grabs the next decade.”
Separately, Tesla will also enjoy increased demand from China and Europe, two regions that have seen a clear acceleration in EV adoption, the analysts said.
“The linchpin to the overall bull thesis on Tesla remains China, which we estimate will represent 40% of deliveries for the EV maker in 2022,” they said, despite transitory headwinds such as chip and component shortages.
The US market, in contrast, has been a laggard. Thus far, the analysts said only 2% of automobiles domestically are EVs. Still, the analysts estimated that, globally, the current trajectory suggests EVs will represent 10% of autos by 2025 and 30% by 2030.
“We have always treated Tesla as a disruptive technology vendor and not a traditional auto vendor,” they said. “The EV stocks are reflecting future parabolic growth and margin potential over the coming years, with now the execution/capacity story taking hold into 2022.”