Investing

Tesla price target raised to $556 by Argus Research, highest on Wall Street

Key Points
  • Argus research raised its price target on Tesla to a new high among major Wall Street analysts.
  • Tesla beat expectations for fourth quarter deliveries.
  • Tesla recently rolled out its Model 3 in China, a key market for electric vehicles.
Tesla Inc CEO Elon Musk attends an opening ceremony for Tesla China-made Model Y program in Shanghai, China January 7, 2020.
Aly Song | Reuters

Argus Research analyst Bill Selesky raised his 12-month price target on Tesla to $556 from $396 on Tuesday.

Selesky cited Tesla's strong fourth quarter deliveries, where it topped analyst expectations, as one reason for the change. The new price target makes him the biggest bull among major analysts tracked by FactSet, and reflects about a 19% upside from where the stock currently trades.

"We are raising our 2020 EPS estimate to $5.96 from $4.40 to reflect improved economies of scale in 2020 production and delivery results and a better-than-expected ramp up of vehicles produced at the Shanghai factory in China," Selesky said in a note to clients.

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Selesky also said he expects Tesla to see growth in its other segments, like energy generation.

The company started delivering Model 3 cars built at its new Shanghai factory last month. The factory was operational ahead of the company's stated deadline. China is the world's biggest market for electric vehicles.

Shares of Tesla have roughly doubled in the past six months, making the electric vehicle company's market cap similar to that of legacy automakers General Motors and Ford. Those companies are still valued more highly by investors when taking debt into account.

Among all analysts listed on FactSet, a small firm named Elazar Advisors has the highest price target for Tesla at $734 per share.

WATCH: Venture capitalist compares Musk's strategy in China to Sun Tzu's 'Art of War'

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