Tesla Inc. (TSLA) – Get Report shares powered higher Thursday after analysts at Goldman Sachs boosted their price target on the clean energy carmaker ahead of its scheduled addition to the S&P 500 later this month.
Goldman analyst Mark Delaney lifted his rating on Tesla to ‘buy’ from ‘neutral’, and pumped his price target on the group by more than 70% to $780 per share, the highest on Wall Street, as he argued that a mid-to-high 20% share of the electric vehicle market could put Tesla on pace to produce between 15 million and 20 million cars per year by the end of the next decade.
“The shift toward battery electric vehicle adoption is accelerating and will occur faster than our prior view,” Delaney noted, adding that lower battery prices will implore more electric vehicle purchases.
Tesla shares were marked 4.3% higher in early trading Thursday to change hands at $593.30 each, a move that would extend the stock’s quarter-to-date gain past 55%.
Last month, S&P Dow Jones, which manages equity benchmarks around the world, said it would add Tesla shares to the S&P 500 on December 21, a move that could trigger a collective 73 million in new purchases from investment funds that track the world’s most traded index. Tesla shares have risen more than 40% since the November 16 announcement.
Tesla, which became eligible for inclusion following its fourth consecutive quarterly profit over the summer and has a market cap of $539.2 billion, will sit just ahead of Visa Inc. (V) – Get Report, and just below Warren Buffett’s Berkshire Hathaway (BRK.B) – Get Report on the U.S. benchmark.