Fresh off a day of big gains, where Tesla (TSLA) shares increased 9.05% to $709.89, Goldman Sachs has jumped onboard the Tesla train and issued a ‘Buy’ rating in a note to investors on Tuesday.
Along with the ‘Buy’ rating, Goldman Sachs analyst Mark Delaney set a price target for TSLA at $864, a little over $100 less than the company’s all-time high of $968.99. The reason for change of heart on Tesla is partly due to Tesla’s big lead in EVs, which is only likely to grow due to the coronavirus outbreak.
“We are positive on Tesla because we believe that the company has a signiﬁcant product lead in EVs, which is a market where we expect long-term secular growth.“
Delaney also said that given Tesla’s revenue growth, the automaker is “attracively valued” compared to other auto and more importantly tech companies.
Goldman Sachs, as part of their analysis, took a unique look at the number of Tesla app downloads and charted it against the number of deliveries. Not surprisingly, there was a good correlation between the two as only new owners would be downloading the app. Given the statistics on app downloads are available on a weekly basis, this is a good way to monitor and estimate Tesla’s quarterly results, which Goldman Sachs will continue to do.
Tesla shares (TSLA) were up in after-hours trading after the new ‘Buy’ rating from Goldman Sachs.