Tesla (NASDAQ: TSLA) received another raised price target from investment firm Piper Sandler to $2,400 from $2,322 following the electric automaker’s positive Q2 Earnings Call. It is the highest price target currently for TSLA stock.
Sandler analyst Alexander Potter raised the firm’s price target by $88 and reiterated an Overweight rating for Tesla’s shares.
After the Q2 2020 Earnings Call solidified that Tesla had secured its fourth consecutive profitable quarter, Potter stated that the electric automaker “deserves ‘must own’ status.” Four straight quarters of profitability is a record for Tesla, and its impressive performance throughout the first six months of 2020 was unheard of given the circumstances.
Piper Sandler raises TSLA price target to $2,400, calls it a "must own" name & considers Q2 results "undeniably impressive". pic.twitter.com/FzYW3w71It
— 𝗧𝗲𝘀𝗹𝗮 𝗙𝗮𝗰𝘁𝘀 (@truth_tesla) July 23, 2020
Company CEO Elon Musk stated that he was thankful for all of the hard work Tesla employees put in throughout the first half of the year. Challenges ranged from COVID-19 enforced shutdowns, to ramping a new vehicle, which is rarely profitable during its first few months of production.
However, Tesla managed to overcome a variety of obstacles, and it is the only automaker to remain profitable in terms of Year-over-Year margins so far. Other car companies have experienced drops in demand and substantial capital loss because of the current economic and social situation.
Even though Tesla benefited from credit-related revenue in Q2, Potter still calls the company’s performance “undeniably impressive,” especially considering the Silicon Valley-based company could reach or even exceed a yearly goal of 500,000 deliveries.
With Tesla continuing to develop a series of new self-driving features that are due to roll out within the coming months, along with the market share “reflecting,” Potter doesn’t believe anyone should sell TSLA shares at the current time. In a note to investors, the Sandler analyst said he “can’t envision” selling shares with the upcoming developments.
Tesla is set to release a “feature complete” version of its Full Self-Driving suite within the coming months. Currently, the only FSD suite characteristic that is missing is “Autosteer on City Streets,” which will allow owners of FSD-capable Tesla electric vehicles to change lanes and navigate through tight, fast-moving city environments without much intervention.
Tesla is currently operating with two functioning production facilities in Fremont, California, and Shanghai, China. The company announced yesterday that it has already started building its next U.S. facility, which will be located in Austin, Texas. The company also plans to handle the European market with Giga Berlin in Brandenburg, Germany, which will open in July 2021.
At the time of writing, TSLA stock was trading at $1,598.68, up 6.35%. The stock has risen over 360% so far in 2020. It traded at $430.26 on the first trading day of the year.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.