Tesla (NASDAQ: TSLA) received a higher price target from Dan Ives of Wedbush Securities on Wednesday morning, with the analyst putting his estimates at $800 a share. His previous mark was roughly a third less than his updated price target.
Ives’ increase in the price target for TSLA stock is based on his opinion that the electric car company is “turning the corner” in terms of demand and production recovery, following the reopening of the company’s Fremont facility. A note Ives wrote to clients stated his one-year target increase, along with his recommendations of a “Neutral” rating on the company’s shares. He has held this rating for over a year, The Street reported.
“While Tesla (and every other auto manufacturer) is navigating this unprecedented Covid-19 environment, the company took a major step forward around fulfilling demand and production concerns with the Fremont artery now up and running after the Musk vs. Alameda County stand-off got resolved,” Ives wrote.
The Wedbush analyst is talking about the sparring match Tesla CEO Elon Musk had with Alameda County health officials just a few weeks ago. After California Governor Gavin Newsom announced that some manufacturing businesses would be allowed to reopen, Tesla geared up to resume activities on the Fremont factory. Musk and company HR representative Valerie Capers Workman sent emails to Fremont employees instructing them to prepare for their next shift.
Alameda County health officials immediately put a stop to Tesla’s plans. In the weekend that followed, Musk stated that Tesla would be moving its headquarters and future projects from California to Nevada or Texas. A lawsuit was also filed against Alameda County.
The following Sunday, Tesla workers returned to Fremont without approval. Eventually, Tesla came to an agreement with Alameda County health officials to reopen the Fremont plant after officials acknowledged the company’s “Return to Work Playbook,” a 38-page manual explaining how the company would remain safe during the pandemic.
Ives proved quite conservative about Tesla’s Q2 delivery numbers, which he expects to be lower due to “a host of logistical issues as well as lockdown conditions now starting to ease across the U.S. and Europe.” However, Ives also recognizes the strength Tesla holds in Asia, as he wrote, “it appears underlying demand for the Model 3 in China is strong.”
The Wedbush analyst released his new price recommendation as media started to cover price rollbacks on the Model S, Model X, and Model 3.
At the time of writing, TSLA stock sits at $818.87.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.