Transportation Innovation

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>>> Tesla Stock Is Worth $400B. Here’s Why.


Barron's

By Al Root

Aug. 27, 2020


https://www.barrons.com/articles/ev-stocks-nio-li-auto-tesla-stock-51598478701?siteid=yhoof2&yptr=yahoo


There is no stopping electric vehicle stocks these days.

EV stocks Barron’s tracks rose about 6% Wednesday, led by an incredible 28% gain in shares of Chinese EV maker Li Auto (ticker: LI).

The Wednesday gain of 6% is great, but looks paltry compared with the average 38% climb posted by the same EV stocks so far in August. The stock market is up too, but nothing like the gains of the EV stocks. The S&P 500 and Dow Jones Industrial Average are up about 6% and 7%, respectively.

Electric Performance

EV Stocks

*Note: Name of EV companies different SPACs are merging with.


Hyliion*

NIO

Lordstown*

Tesla

Li Auto

Nikola

Workhorse

Fisker*

S&P

BYD

Canoo*


What’s going on? For starters, analysts are raising price targets and upgrading shares. NIO (NIO) stock, for instance, has been upgraded twice in two days. UBS analyst Paul Gong took his NIO target from $1 all the way to $16 a share. Li also got its first two analyst ratings this week—both ratings are Buy.

Then there is Tesla (TSLA). It’s the EV behemoth that has helped catalyze the rally in the entire sector. Jefferies analyst Philippe Houchois increased his Street-high price target to $2,500 Wednesday. And investors continue to be excited about Friday’s stock split, Tesla’s potential inclusion in the S&P 500, and its coming battery technology day scheduled for Sept. 22.

Tesla shares closed up 6.4% to $2,153.17 on Wednesday, giving the world’s most valuable car company a market capitalization north of $400 billion. The company is more valuable than Johnson & Johnson (JNJ), making it the eighth most valuable company in America.

And there is more going on the world of electric vehicles.

On Wall Street, activity begets more activity. And there is a lot of capital market activity in the EV space lately. Li Auto recently went public. Several special purpose acquisition companies, or SPACs, have bought EV startups. Xpeng (XPEV) is expected to price its IPO Wednesday evening. Reports indicate pricing will exceed $13, the top end of its expected range. Investors want more EV exposure.

Year to date, EV stocks are up about 340%. The number a few days ago was about 250%. Whether they are up too high is anyone’s guess.

Tesla stock is up 0.8% to $2,171.04 in premarket trading Thursday.

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