The relentless rally in Tesla Inc. shares has driven its valuation beyond consumer product behemoth Procter & Gamble Co., as investors bet on the electric vehicle maker’s ability to dominate the automotive market of the future.
The stock closed up 11% at a record $1,835.64 in New York on Monday, despite reports of a drop in the registrations of Chinese-made Tesla cars in July. China is a key market for Tesla, and the Elon Musk company is ramping up production there after starting deliveries from its massive Shanghai plant around the beginning of the year.
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Tesla shares are now up 339% this year, fueled by growing anticipation that the company will be included in the S&P 500 Index. The carmaker’s plan to split its stock 5-for-1 to make shares more accessible for individual investors is also expected to drive up demand. Tesla was the eighth most popular stock on the Robinhood app on Monday, according to data from Robintrack.net.
Meanwhile, Wall Street has warmed to the stock, as evidenced by a steady stream of upgrades and price target boosts. The latest came from Wedbush analyst Daniel Ives, who raised his target to $1,900 from $1,800, saying Tesla has seen strong demand in Europe and China so far in the third quarter, with the US market softer.
“The China growth story is worth at least $400 per share in a bull case to Tesla as this electric vehicle penetration is set to ramp significantly over the next 12 to 18 months," Ives wrote. He kept his bull-case target at $2,500.
Tesla’s market value is now around $342 billion, surpassing P&G’s $337 billion. The maker of Pampers and Crest is the 10th largest stock in the S&P 500, according to Bloomberg data. Walmart has the ninth largest market capitalization in the S&P 500 at $384 billion.
This story has been published from a wire agency feed without modifications to the text.