(Bloomberg) -- Tesla Inc.’s potential success in energy generation and storage will be the next big thing to fuel the rally that’s already pushed the stock to more than $858, analysts at Piper Sandler Cos. said as they increased their price target by more than 27%.
Piper raised its target to $928 from $729, making it the most bullish among forecasters tracked by Bloomberg. The stock has more than doubled in the past four months and closed at $858.40 on Tuesday, near the record $887.06 reached earlier this month.
“It’s easy to forget that TSLA sells batteries and solar power products; after all, the segment was only 6% of sales in 2019,” analysts Alexander Potter and Winnie Dong wrote in a Feb. 18 note. “But management says that the solar+storage business will one day rival the Automotive segment, and if this is true, then investors will eventually need to pay attention.”
In order to gauge Tesla’s chances of success in generating and storing solar power, the analysts recently installed a solar-based system to use for charging a Model X and the results have been “illuminating” so far, they wrote in the note. Piper’s new price estimate implies an 8.1% advance from the last close.
The development comes after the brokerage raised its target in January, saying Tesla’s growth potential in China meant the stock was undervalued. The shares reached a record close of $887.06 on Feb. 4. With a price estimate of $827, Zacks Investment Research has the second-highest target, according to data compiled by Bloomberg.
The electric-car maker started delivering its China-built Model 3 sedans to local customers last month, a year after its first factory outside the U.S. broke ground. Last year, Tesla delivered a record 367,500 vehicles globally.
--With assistance from Dana Hull.
To contact the reporter on this story: Lianting Tu in Singapore at ltu4@bloomberg.net
To contact the editors responsible for this story: Chris Nagi at chrisnagi@bloomberg.net, Margo Towie, Cecile Vannucci
©2020 Bloomberg L.P.
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