(CU)_Shares of electric carmaker Tesla Inc surged nearly 20 per cent on Tuesday (9 March), reporting its largest daily gain in a year. With the company’s sales in China experiencing a significant increase, an analyst raised his rating on the stock, which added over $100 billion to Tesla’s market capitalisation.
The jump would end a five-day streak of losses for the company in a Nasdaq slump in which investors spooked by rising interest rates which have abandoned growth stocks with heady valuations.
Accordingly, Pierre Ferragu, an analyst at New Street Research, raised his Tesla rating from “neutral” to “buy”, and rose his target price from $578 to $900.
“As much as the market severely corrected the recent excesses of optimism reflected in Tesla’s valuation, our recent work strengthened our confidence about the solid outlook for the company in the next 2 years,” Ferragu wrote in a client note.
According to Chinese auto industry body CPCA, in February this year, Tesla sold 18,318 China-made vehicles, which was a significant rise from sales in the previous month which amounted to 15,484 vehicles.
Over the past six months, Tesla stocks have remained up about 70 per cent, and 12 analysts recommend buying Tesla shares, 10 recommend selling, while 13 analysts have neutral ratings, according to Refinitiv.
Meanwhile, Tuesday’s Tesla rally accompanied a 3.7 per cent jump in the Nasdaq, while the carmaker was the biggest contributor to the 1.4 per cent gain in the S&P 500.
