June 9, 2023: Tesla’s stock has been on a remarkable upward trend, with ten consecutive days of gains leading into Friday’s trading. Analysts predict that this streak will likely extend to 11 days thanks to a significant deal and support from Wall Street.
During midday trading, Tesla’s stock was up by approximately 6% at $248.88, outperforming the S&P 500 and Nasdaq Composite, which saw modest increases of around 0.2% and 0.3%, respectively.
Today, Tesla is the most actively traded stock in the S&P and the index’s top gainer.
According to Dow Jones Market Data, if the streak continues, it will mark the longest run of consecutive gains since January 2021. Bespoke Investment Group highlights that this 11-day streak is a new record. Tesla’s stock has risen by about 36% during this period.
Tesla’s shares experienced a significant surge on Thursday evening following an announcement that General Motors (GM) and Tesla have agreed to allow GM’s electric-vehicle drivers to charge at Tesla’s supercharger network. This deal is similar to the one Tesla previously struck with Ford. Analyst Tom Narayan from RBC expects a similar announcement from Stellantis.
Increased utilization of Tesla chargers by other electric vehicles translates into more revenue for Tesla. In a report, Wedbush analyst Dan Ives noted that this deal brings the sum-of-the-parts (SOTP) valuation further into play. SOTP valuations assess the value of different business segments within a company to determine if they imply a higher or lower stock price.
In the case of Tesla, the company sells cars, solar roofs, battery storage products, autonomous driving software, and insurance and operates a vast network of EV-charging stations.
Ives raised his price target for Tesla’s stock by about 40%, now setting it at $300 per share, up from $215. He maintains a Buy rating on the shares. He emphasized that while other automakers are playing checkers, Elon Musk and Tesla are playing chess in the broader electric vehicle (EV) industry. Ives added that recognizing the underlying value in Tesla’s EV ecosystem is essential as the market evolves beyond 2024. As a result, Tesla has been added to the Wedbush Best Ideas List.
With these changes, the average analyst price target for Tesla’s stock has increased slightly to $194 per share, while the stock is currently trading at nearly $250 per share. A couple of weeks ago, Tesla’s stock was priced at around $185. The past 11 trading days alone, the stock has surged by approximately 37%.
About 49% of analysts covering Tesla rate the shares as Buy, slightly lower than the average Buy-rating ratio for stocks in the S&P 500, which is around 53%.
Although no recent downgrades have occurred, CFRA analyst Garrett Nelson has become slightly less optimistic about the stock. He downgraded his rating from Strong Buy to Buy, reflecting the stock’s recent increase. Nelson, however, still views the GM and Ford deals as positive news, raising his target stock price to $300 per share from $250.