Morgan Stanley boosted its price target on Tesla Inc. shares by a third, citing “extraordinary” sales growth as the electric-vehicle maker overcame unprecedented industry supply shortages.
Analyst Adam Jonas said Tesla’s third-quarter sales surged by about 70%, according to his calculations, even as global automobile production fell by about a fifth.
The company has claimed a place among the top manufacturers in terms of profit margins, Jonas said as he reiterated an overweight rating.
His new target of $1,200 is the joint second-highest among 46 analysts tracked by Bloomberg. The shares rose 2.2% to $930 in premarket trading as of 5:21 a.m. in New York Monday.
Tesla hit a record high last week after Elon Musk’s company reported earnings that beat Wall Street estimates, wrapping up a ninth-straight quarter of profit as the 18-year-old electric-vehicle maker outperforms rivals battling a dearth of semiconductors crucial for production.
Looking beyond the sales update, Tesla’s software business and technologies in areas like insurance and battery supply should allow it to become a “champion” of both autos and energy in the long-run, Jonas said.