Global Markets

Tesla shares pass $500 barrier for the first time as price targets extended

On Monday, Tesla stock surged well past $500 amid recent high-water marks that have pushed the shares to levels that outperform the S&P 500 index.

Analysts at Oppenheimer were forced to increase the automotive company´s price target to a Wall Street high of $612 per share and has requested Tesla´s inclusion in US equity benchmarks.

Managing director and senior analyst at Oppenheimer, Colin Rusch, almost doubled his benchmark from $385 per share in late October, to $612 per share in a recent client note that states Tesla has reached “critical scale” to support sustainable free cash flows.

Rusch has also insinuated the energy-focused company could pose an “existential threat” to transport companies that omit the motivation or skill to keep up with Tesla.

Elon Musk´s business has received a string of similar boosts by Tesla analysts recently as the company´s shares continued to increase after fourth-quarter vehicle deliveries exceeded expectations.

Furthermore, a Chinese official’s recent announcement that the government won´t significantly scale back electric-vehicle subsidies this year was another positive development for the electric car manufacturer.

In the last three months, Tesla shares have grown by 103 per cent, while the S&P 500 has gained 10 per cent. Monday saw a record close of $524.86 as shares rose by 9.8 per cent following a two-day pause last week amid a couple of downgrades.

Gene Munster, of venture-capital firm Loup Ventures, said: “This most recent share price surge is attributed to a combination of two factors, short-covering and greater investor optimism regarding Tesla’s 2020 demand,”

“We continue to expect shares to be volatile in the years ahead but, ultimately, trend higher given the company’s pole position in undeniable truths related to electrification and autonomy” he said.