Tesla shares spike again as analysts embrace EV and “illuminating” solar story

Stock values for Californian car maker Tesla have skyrocketed again, shooting up 6.9% on Wednesday (US time) after analysts posted new price targets, citing continuing demand for the Tesla Model 3 and the potential for Tesla’s “illuminating” solar energy systems.

Tesla has been on a tear since the year began with share values now five times more valuable than its June, 2019 low.

On Tuesday, stocks surged quickly to more than $US850 piercing a recently upped $US730 target from Bernstein analyst Toni Sacconaghi – more than double the previous $US325 target.

At market close on Wednesday Tesla stocks were worth $US917.42 ($A1,373.79) after topping out at $US944.78 ($A1,414.76).

Reasons cited for the price hike by Sacconaghi to clients in an email included “Tesla’s ability to be sustainably profitable”,  healthy demand for the Model 3, the fact that both gross margins and operating expenditures seemed poised to materially improve, as well as “sputtering” and “robust” product and production pipelines, according to Market Watch.

However, it is not only “clean and green” electric vehicles, but also Tesla’s push into renewable energy production that is causing analysts to post all-time high targets.

Piper Sandler, which hiked its price target above $US900, even went so far as to install its own Tesla solar energy system, to gauge a “next phase of growth” for Tesla where consumers would not only drive an EV but also generate their own power from its rooftop solar.

“In order to gauge Tesla’s chances of success, we recently installed a solar system to use for charging a Model X,” Piper Sandler’s Alexander Potter wrote in a note to clients according to Market Watch.

“The results have been illuminating so far, and we’re upping our [price target] accordingly to $928 from $729.”

While Morgan Stanley more conservatively raised its price target from $US360 to $US500 saying overall it believes Tesla values will fall, its bull case for Tesla is now pinned at $US1,200 ($A1,796.94).

This is dependent on Tesla achieving an average of 400,000 units a year – the same production capacity for which Tesla CEO and co-founder Elon Musk said at the company’s Q4 2019 that its electric vehicle factories are already capable.

“Our new bull case reflects 4 million units of auto volume by 2030 with a 12% operating margin. This compares with our base case forecast of 2.2 million units and a 10% OP margin by 2030,” Jonas said in a note according to CNBC.