January 11, New York: Shares of Tesla outperformed almost all other stocks by an extremely wide margin the year-gone-by at 743%. Does that imply an incredible run is just behind it?
Well, maybe not.
Tesla’s Shares during the First Week of New Year
The first week of the year 2021 yet again witnessed Tesla not only soaring high but ranked among the best performers in the S&P 500 rising at 24.7 per cent, which was just 1 percentage behind LBrands (LB) – the market leader. This surge in the markets this week coupled with Tesla’s previous year’s performance was enough to turn CEO Elon Musk the richest person on the planet. Tesla’s shares surpassed that of Facebook’s to become the fifth most appreciated stock in the US markets.
If it is able to keep up its ongoing momentum picked up in the first week of 2021, Tesla’s stock would match up all of the previous year’s upsurge by mid-March. While there’s no such prediction of a yet-another increase of 700 per cent in the shares in 2021, nonetheless hopes are held high for this auto giant. Even a few actively bullish analysts are predicting that Tesla’s shares can hit an amount as high as $1,000 by the end of 2021—which is about 14 per cent rise in price for the rest of 2021 from its record high close on Friday.
On the other hand, several analysts with a comparatively positive outlook for the company have a 12-month target price surging well below Friday’s $880 mark. The current mean target price set by these analysts is $440, clearly indicating chances of a 50 per cent drop in shares.
Predictions for Investors’ Pricing
Now, what makes it so difficult to predict the auto giant’s shares investors’ pricing method. Investors are not pricing depending upon the current performance of the company. If they were, then a company that sold hardly 500,000 cars last year, would barely be worth more than the world’s 10 most valuable auto companies combined together, which together account for a substantial majority of the world’s almost 75 million annual car sales.
Instead, they are betting on Tesla’s capability to keep growing rapidly and eventually capture a considerable share of the world’s increasing appetite for electronic vehicles. There are predictions that within the next two decades, Tesla can become the world’s number one auto manufacturing company, not just electronic ones, but any kind of cars.
However, it is all but conjecture. Nevertheless, while Tesla’s stock surging cannot be undermined, what is indisputable is that analysts have been proven wrong repeatedly when it came to Tesla stocks.
As for the future of Electronic Vehicles, let’s be patient for some more time.