Picture: BLOOMBERG/CHRIS RATCLIFFE
Picture: BLOOMBERG/CHRIS RATCLIFFE

Long-term bear RBC Capital Markets upgraded its recommendation on Tesla, admitting it had misjudged the electric-vehicle maker.

“There is no graceful way to put this other than to say we got TSLA’s stock completely wrong,” analyst Joseph Spak wrote in a report lifting Tesla to sector perform. The broker had maintained a sell-equivalent underperform rating since January 2019, according to data compiled by Bloomberg. During that time, the shares have surged about 1,200%.

Re-evaluating his view “in the spirit of New Year’s resolutions”, Spak said his biggest miss was underestimating California-based Tesla’s ability to take advantage of its stock price to raise capital and fund growth or acquisitions. He also increased his 2025 delivery estimate to 1.7-million cars from 1.3-million, based on capacity and market share assumptions, and his price target for the stock to $700 from $339.

RBC’s comments follow a 50% price-target boost on Tesla earlier this week by Morgan Stanley analyst Adam Jonas to a Wall Street-high $810, after the carmaker posted better-than-expected fourth-quarter deliveries and a $5bn capital increase. In November, the broker gave the stock an overweight rating for the first time since 2017.

Tesla rose as much as 4.9% to a new intraday record of $792.93 a share and traded up 4% at 9am in New York. Electric-vehicle peers also gained as Joe Biden’s formal recognition by Congress as the next US president was seen as a positive for the industry. Nio and Nikola increased as much as 7.2% and 8%, respectively.

Among analysts tracked by Bloomberg, Tesla now has 13 buy recommendations, 13 holds and 14 sells.

Bloomberg  

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