Abu Dhabi, UAEThursday 20 February 2020

Tesla's share could touch $6,000 in five years, analyst says

At $93.46bn market cap, the California-based EV maker is currently the most valuable US automaker

Tesla shares have more than doubled since October last year, when they were trading at $254. AFP
Tesla shares have more than doubled since October last year, when they were trading at $254. AFP

Electric vehicle manufacturer Tesla’s stocks, which crossed $500 (Dh1,835) a share mark for the first time on Monday, could be worth $6,000 per share in the next five years, according to Catherine Wood, founder of the New York-based financial services firm Ark Investment.

This bullish prediction is based on the grounds that California-headquartered firm “will not considerably lose its market share”, she added.

“As we are looking at other auto companies, seeing how far behind Tesla they are, we are beginning to believe they [Tesla] might not lose market share, which is a huge change in our assumptions,” Ms Wood told CNBC.

Earlier in February 2018, she said “market share was a concern” for Tesla and predicted the company would trade at $4,000 per share at one point of time in future.

Tesla led the EV market in the third quarter of last year, taking 20 per cent of the global share, according to Hong Kong's Counterpoint. It was followed by Chinese car makers BAIC Group and BYD Auto who retained 10 per cent at 9 per cent respectively. German car-maker BMW had an 8 per cent share of the market.

The company’s shares have more than doubled since October last year, when they were trading at $254. They closed on Wednesday at $518.50.

The firm’s current market cap is almost $93.46 billion – making it the most valuable US automaker in the history. Nearly $6,000 per share would put Tesla comfortably in the $1 trillion stock market value club, based on the company’s 180 million shares outstanding.

Financial company Jefferies is also optimistic and expects Tesla shares to climb another 14 per cent in the coming days.

Tesla is the only automaker “engaged in a positive-sum game” in the EV business “amid rising market acceptance”, Jefferies’ analyst Philippe Houchois wrote in a research note on Tuesday.

He forecasts Tesla should turn profitable this year.

Tesla is expected to report an adjusted profit of $1.53 a share on sales of $6.9bn in the last quarter of 2019, according to analysts polled by FactSet, a Connecticut-based financial data and software company. The company reported a profit of $1.93 a share on sales of $7.2bn in the last quarter of 2018.

Updated: January 16, 2020 10:04 AM

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