While most electric vehicle (EV) stocks were on an absolute tear in 2020, most of them have underperformed the broader markets year to date. We can attribute the recent decline in stock prices to steep valuations of EV stocks as well as an increase in the number of players, making the EV segment a crowded market.
However, the electric vehicle space is poised to benefit from multiple secular tailwinds in the upcoming decade making these stocks interesting potential investments for the long term. The shift towards clean or renewable energy solutions is accelerating and the ongoing pullback provides investors an opportunity to buy the dip.
Tesla stock forecast to touch $850
Investment research firm Jeffries increased Tesla’s stock price to $850 from $700 and upgraded its rating from “hold” to “buy”. Jeffries is optimistic about Tesla’s estimated earnings growth that is forecast to rise at an annual rate of 45% in the next five years. Tesla stock is currently trading at a price of $717 and the consensus 12-month target price is $655.
As consumer spending transitions towards electric vehicles, Tesla and its peers are well-positioned to benefit from economies of scale and lower operating expenses. Jeffries also expects Tesla to increase battery and assembly capabilities as well as its product line which will include the highly anticipated Cybertruck.
Tesla delivered around 50,000 vehicles in 2015 and this figure rose to almost 500,000 last year. In 2021, the company remains on track to increase vehicle deliveries by 50% year over year. In the first quarter of 2021, Tesla’s deliveries were up 109% year over year. This growth accelerated in Q2 as deliveries soared by 121%, and the company manufactured 200,000 vehicles.
Tesla remains a market leader in this highly disruptive segment. In 2020, EV sales grew 41% year over year to 3.1 million units, accounting for 4.6% of total cars sold all around the world. This suggests Tesla accounted for 16% of the total EV market in 2020.
Morgan Stanley is bullish on Fisker
Morgan Stanley (MS) analyst Adam Jonas said he has a price target of $40 for Fisker stock which is almost 200% higher than its current trading price of $14.69. Jonas expects the stock to touch $90 in a bull-case scenario.
Fisker has also partnered with Magna-Steyr, an Austrian-based automobile manufacturer. This contract manufacturing collaboration will provide Fisker with cost benefits and accelerate its vehicle launch. The association will also help Fisker improve the bottom line and increase manufacturing capacity as demand increases in the upcoming years.
Fisker stock went public last year and has since returned 53% to shareholders. However, it’s also trading 50% below record highs and is down over 3% in 2021.
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TSLA shares were trading at $719.31 per share on Friday afternoon, down $2.94 (-0.41%). Year-to-date, TSLA has gained 1.93%, versus a 19.94% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditya Raghunath
Aditya Raghunath is a financial journalist who writes about business, public equities, and personal finance. His work has been published on several digital platforms in the U.S. and Canada, including The Motley Fool, Finscreener, and Market Realist. More...
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