Tesla (NASDAQ: TSLA) stocks are seeing strong bullish momentum in Friday trading. Electric vehicle (EV) the company’s share price rose 6.9% at 3:15 PM ET amid a backdrop of a 1.2% gain for S&P 500 index and an increase of 1.7% for Nasdaq Composite index.
With upward momentum for the broader market today, Tesla is gaining traction thanks to positive industry and analyst reports. With a Reuters report saying the EV specialist sees strong sales in China, the company’s shares are also getting a boost from a price target increase from Canaccord.
Reuters recently published a report on Tesla’s sales performance in China during 2024, and the analysis paints an optimistic picture. Vehicle sales in China rose 8.8% year-on-year to more than 657,000. Even better, the report shows that vehicle sales accelerated above that rate to post 12.8% growth and sales of 83,000 units last month. The results look particularly significant following Tesla’s recent vehicle deliveries and Q4 2024 production report.
Tesla’s Q4 update announced that the company produced 459,000 vehicles and delivered 495,000 vehicles in the period. Although the performance was not as bad as recent projections predicted, the results were still below the average estimate of analysts. The performance brought the company’s total shipments during 2024 to 1.79 million vehicles, below Wall Street’s average forecast for shipments of 1.806 million vehicles. Tesla’s 2024 deliveries were less than the roughly 1.8 million vehicles delivered in 2023, the first time the company has seen an overall decline in unit sales. With total shipments missing expectations, signs of momentum in China are a significant bright spot.
In a note released before the market opened today, Canaccord maintained a buy rating on Tesla and raised its one-year price target on the stock from $298 per share to $404 per share. After the stock’s rally today, the new price target actually implies a decline of roughly 0.4%.
Canaccord’s analysts believe Tesla’s business fundamentals justify valuation multiples that are on par with other megacap tech peers, including Nvidia, Appleand Amazon. More importantly, the company believes Tesla is positioned to capitalize on multiple “generational” growth opportunities in categories including self-driving vehicles, batteries and robotics. So while Tesla’s one-year price target implied limited growth at the time of the announcement and has already been exceeded, Canaccord believes the electric vehicle leader has the makings of a long-term winner.
