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Tesla Shares Jump as JMP Lifts Rating to ‘Market Outperform’
Tesla Inc. shares jumped higher in pre-market trading Tuesday after analysts at JMP Securities lifted their rating on the clean energy carmaker to “outperform”, arguing investors will be able to buy the stock cheaply amid the ongoing market upheaval linked to the coronavirus. JMP said its new price target of $1,060 per share, one of the highest on Wall Street, implies earnings multiple that “may seem excessive”, but argued that with investors still happy to buy unprofitable automakers at lower multiples, Tesla is growing at a compound annual rate of 23%. Based on 2021 estimates, JMP said, Tesla is valued at around 20 times forecasted earnings — compared to around 18.2 times for the S&P 500 — and could churn out nearly 2 million vehicles a year by 2025.
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