NEW YORK (Reuters): Tesla Inc was set to add about $50 billion to its market value as the electric car-maker’s shares surged on Monday, after it posted record deliveries on strong demand in China that helped it offset the impact of a global shortage in auto parts.
The stock jumped nearly 8% in pre-market trading and it was on track to hit its highest in over a month.
The company said on Friday it was encouraged by the strong reception of its Model Y crossover in China and it was quickly progressing to full production capacity.
Analysts remained hopeful as despite a global chip shortage that has slammed the entire auto sector, various supply chain issues and rising competition, Tesla still managed to produce roughly the same amount of vehicles in the first quarter as in the fourth quarter.
At least three brokerages raised their price targets on Tesla’s stock. Brokerage Wedbush was the most aggressive, increasing it by $50 to $1,000, much higher than the median price target of $712.50, as per Refinitiv data. Wedbush also raised its rating to “outperform” from “neutral”.
“Tesla is executing impeccably. I am not surprised by the strong deliveries,” said Roth Capital Partners analyst Craig Irwin, even as he added that the stock is “egregiously overvalued.”
“EVs are an exciting place to be, and Tesla is the leader.”
Chief Executive Officer Elon Musk’s personal wealth has been boosted by a more than eight-fold surge in the stock’s value last year, even though its production is just a fraction of rivals such as Toyota Motor, Volkswagen and General Motors.
Tesla delivered 184,800 vehicles globally during the first quarter of 2021, above estimates of 177,822 vehicles, according to Refinitiv data.
“Great work by Tesla team!” Musk tweeted here on Monday. “Special mention of Tesla China.”
Tesla’s shares were at $713 before the bell, while other EV makers, including NIO Inc, Workhorse Group and Xpeng Inc were up about 3%.
“The (EV) sector looks primed to resume its march higher, considering the surging demand for EVs in China, Europe, and the US Tesla’s delivery numbers could be the spark needed to jumpstart the next rally,” said Jesse Cohen, senior analyst at Investing.com.