Following the annual meeting of Tesla stockholders on August 4, when investors voted in favor of a 3-for-1 stock split, TSLA shares will start trading today for a third of their August 24 value.
Tesla stock closed at $891 per share yesterday, which means it should start trading at around $297 per share this morning, as the stock split goes into effect today, August 25. Analysts have started offering their price target updates post-split, and most of them are optimistic.
Wedbush managing director Dan Ives, one of the top Wall Street analysts covering Tesla, said he's raising the price target on Tesla from $333 a share to $360 a share post-split. In a post on Twitter, he explained that improved production out of Gigafactory Shanghai during the September quarter was as one of the main reasons for the increase.
Tesla China recently completed its upgrades of the Giga Shanghai's Model 3 and Model Y assembly lines. The upgrades are expected to increase local Model Y production to 14,000 units a week and Model 3 production to 7,700 units a week.
Giga Shanghai has been a major driving force behind Tesla's growth in recent years and is likely to remain one in the future. The plant is expected to play a key role in the automaker's goal of achieving a 2 million annual vehicle run rate by the end of 2022. During the Cyber Roundup shareholders meeting earlier this month, Elon Musk noted that Tesla had already achieved a 1.5 million unit annualized run rate.
In a note to clients, Ives said that he believes Tesla can deliver 2 million electric vehicles in 2023, which would put the automaker in a favorable position against increased competition in the EV segment.
"For 2023 we believe 2 million deliveries potential and massive production capacity will be a significant advantage for Tesla in this EV arms race with competition coming from every angle and geography."
Wedbush's price target for Tesla is rather conservative compared to other analysts, with Morgan Stanley's Adam Jonas and Oppenheimer's Colin Rusch estimating Tesla stock will trade at $383 and $431 a share, respectively. The Future Fund's Gary Black is even more optimistic, updating the price target from $533 to $550.
