Oppenheimer's Tesla analyst advises investors to 'ride the momentum' but protect themselves

Published Fri, Aug 21 202011:27 AM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

(This story is for CNBC Pro subscribers only.) Oppenheimer analyst Colin Rusch, who has a $2,209 per share price target on Tesla, said Friday he continues to believe the electric vehicle maker has more upside potential. The stock closed above $2,000 for the first time ever Thursday and it was adding to those gains Friday. However, Rusch warned investors to be practical be as the stock continues to soar. It's up over 20% in the last five days alone. "I think you kind of ride the momentum here and protect yourself," he said on CNBC's "Squawk Box." Rusch said that a protection strategy depends on how investors have been approaching the stock. "We do see upside near-term to the stock, to that $2,200 number, but I think in this sort of market you have to be practical with some puts or some calls depending on how you're trading the stock," said Rusch. Rusch hiked his price target on Tesla to $2,209 from $968 per share on July 23. Back in January, the analyst became Wall Street' biggest Tesla bull , raising his target by almost 60% to $612 per share . Tesla shares traded around $500 at the time. Investors remain attracted to Tesla's stock, said Rusch, referencing the ongoing push across Wall Street in ESG investing, which evaluates companies on environmental, social and governance ratings. Tesla is a popular name in that category because, in addition to its electric vehicles, it also has a solar panel business. "At this point, we're continuing to see a lot of investor interest across our sector in renewables and incremental buyers, so I'm still bullish on the fundamentals as well as fund flow for this company," said Rusch. Rusch noted that Tesla's stock pulled back shortly after its late July earnings report and consolidated around $1,400 per share. Then after the announcement of a five-for-one stock split , which goes into effect after the market close next Friday, shares began to accelerate to the upside again. It's worth noting that stock splits do not effect companies' fundamentals. "I think that the consolidation on some of the traders happened a few weeks ago," he said, adding that he thinks "we're seeing now is largely new money coming into the stock," which could limit any downside risk. Tesla's potential inclusion into the S & P 500 after a full year of profitability may be another catalyst for the stock, Rusch said. But ultimately, he said Tesla remains a disruptor in transportation, which continues to drive investors to the stock. "There's still a potential significant amount of growth in the market cap for them to go," Rusch said. As of Friday, Tesla's stock market value was around $384 billion — astoundingly nearly six times that of the market caps of General Motors and Ford combined. "Obviously we're giving them a lot of credit here at current valuation," Rusch said. "It's sort of a thing where there's very few names to buy if you're looking at the disruption of the transportation market with companies that have actual experience and products on the road, and Tesla really is the clear leader here. — CNBC's Michael Bloom contributed to this story.

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(This story is for CNBC Pro subscribers only.)

Oppenheimer analyst Colin Rusch, who has a $2,209 per share price target on Tesla, said Friday he continues to believe the electric vehicle maker has more upside potential.

The stock closed above $2,000 for the first time ever Thursday and it was adding to those gains Friday.

However, Rusch warned investors to be practical be as the stock continues to soar. It's up over 20% in the last five days alone.

"I think you kind of ride the momentum here and protect yourself," he said on CNBC's "Squawk Box."