• Tesla shares with extremely good run in 2020
• Morgan Stanley analyst lifts shares to “Overweight”
• Target price increased significantly
Around 480 percent price increase this year: Hardly any other investment was able to ensure such a good performance in investor portfolios in 2020 as the Tesla share. And that, although the electric car manufacturer also suffered from the consequences of the corona pandemic and had to shut down its production for weeks. Even a 5-for-1 stock split couldn’t keep the stock off the $ 500 mark.
Analyst raises price target for Tesla shares
The formation of bubbles, which many investors and experts have been seeing coming for some time, seems to be taken completely calmly on the stock market. Analysts are far from unanimous when it comes to the further price development. But one analyst has now clearly taken the bull’s side and given Tesla shares an ambitious price target.
Adam Jonas from Morgan Stanley now rates the Tesla share as “Overweight” and is for the first time in three years disproportionately confident for the electric car manufacturer. There was also a massive increase in the price target: Instead of 360 US dollars, the expert from the financial house now believes the Tesla share will jump to 540 US dollars – so the share would still have around ten percent price potential.
Tesla is more than just an automaker
The expert cited his assessment of the Tesla business as justification. “If you only evaluate car sales at Tesla, you ignore the many businesses embedded in the company and the long-term value creation that results from Tesla’s core strengths – which are driven by world-class software and additional services,” wrote the analyst.
In this context, the expert specifically mentions the service business, in which self-driving vehicles, GPS, entertainment options, but also performance upgrades and more are recorded. Jonas is anticipating considerable growth potential here in the next ten years. Software services already have a share of one to two percent of total sales – by 2030 the share will increase to more than six percent, the expert believes.
In his eyes, Tesla is much more than just an automaker and will in future tap into strong additional sources of income, especially with services and software offers. High profit margins can be expected here.
Index inclusion in the S&P 500 also plays a role
Apart from the fact that Tesla is likely to attack in the service sector, there is one additional factor that will likely ensure a short-term upward trend in the stock: inclusion in the S&P 500 index. On December 21, the Tesla share will be traded as an index member for the first time and will become one of the most valuable companies in the S&P 500. Fund managers and investors who track the index will now be forced to deposit Tesla shares, which shouldn’t hurt the stock performance either.
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