Tesla (NASDAQ:TSLA) the stock is experiencing strong upward momentum in Friday trading. The electric vehicle (VE) the company’s stock price was up 6.9% as of 3:15 p.m. ET amid a 1.2% gain for the S&P500 index and a gain of 1.7% for the Nasdaq Composite hint.
In addition to the bullish momentum in the market as a whole, Tesla is gaining ground thanks to positive industry reports and analyst coverage. Along with a Reuters report that the electric vehicle specialist was seeing strong sales in China, the company’s shares are also benefiting from an increase in Canaccord’s price target.
Reuters recently released a report on Tesla’s sales performance in China in 2024, and the analysis paints an optimistic picture. Vehicle sales in China increased 8.8% year-on-year to more than 657,000 units. Better yet, the report shows that vehicle sales accelerated above that rate to generate growth of 12.8% and sales of 83,000 units last month. The results seem particularly significant on the heels of Tesla’s recent vehicle deliveries and production report for the fourth quarter of 2024.
Tesla’s fourth-quarter update announced that the company produced 459,000 vehicles and delivered 495,000 vehicles during that period. Although performance wasn’t as bad as most recent projections predicted, the results still fell short of analysts’ average estimate. The performance brought the company’s total 2024 deliveries to 1.79 million vehicles, below Wall Street’s average forecast for deliveries of 1.806 million vehicles. Tesla’s deliveries in 2024 are lower than the roughly 1.8 million vehicles delivered in 2023, marking the first time the company has seen an overall decline in unit sales. With total deliveries falling short of expectations, signs of momentum in China are an important positive.
In a note released today before the market opened, Canaccord maintained a buy rating on Tesla and raised its one-year price target for the stock from $298 per share to $404 per share. Following the stock’s gains today, the new price target actually implies a decline of about 0.4%.
Canaccord analysts believe Tesla’s business fundamentals warrant valuation multiples that are in the same range as other large-cap tech competitors, including Nvidia, AppleAnd Amazon. More importantly, the company believes Tesla is positioned to capitalize on multiple “generational” growth opportunities in categories such as autonomous vehicles, batteries and robotics. So while Tesla’s one-year price target implied limited upside at press time and has already been exceeded, Canaccord believes the electric vehicle leader has the makings of a long-term winner.
