Piper Sandler hikes Tesla price target above $2,300

Yahoo Finance’s Ines Ferre joins Zack Guzman to break down Piper Sandler's latest price target hike for Tesla.

Video Transcript

ZACK GUZMAN: Right now I want to highlight Tesla shares as we're seeing the shares of the electric automaker moving higher yet again here, up by about 2% off the news of a price target boosted. Piper Sandler there with the analysts saying that the price of Tesla could move above $2,300 a share. Keep in mind, the price of the shares in Tesla has already jumped by about 116% since Elon musk himself said shares in the company were too high back on May 1. And for more on why Piper Sandler is giving that street high price target, want to bring on Yahoo Finance's Ines Ferre who has more on the thinking there. And Ines, I mean, this is a pretty serious number there, 23.2, what went into this?

INES FERRE: It's the most bullish on the street, and basically, Analyst Alexander Potter is saying that this price target increase is driven by the software opportunity with Tesla. Now, remember that Piper Sandler had a price target of 935 on the stock, so this is a huge jump for them to increase this price target to 2,322. But basically saying that Tesla has the potential for more than 30% margins with respect to its full self driving software, and it's really hard for competitors to keep up.

The analyst is also saying that deliveries for the second quarter were better than expected. And if Tesla does meet its target of more than 500,000 deliveries for 2020, that will be very impressive given COVID-19. We have seen such a huge run up on this stock. Right now, it's up more than 1.5%.

But just yesterday, it was rallying more than 16%. You can take a look at the two day chart there, and it went almost to $1,800 a share, then it tumbled and down and ended the session yesterday in the red. The year to date, this stock is up more than 260%. And as you noted also, Zack, after Elon musk had tweeted that this stock price was too high back in May, the shares are up more than 114%. And what's very interesting about this Piper Sandler note is that a Twitter follower tweeted out the note and Elon Musk responded with this. He said, wow. So even Elon Musk is sort of amazed at this price target increase.

ZACK GUZMAN: Yeah, no, it's definitely, it's definitely been quite the stock to follow. And also as you noted there, not a lot of companies here could actually meet the guidance they had before all this hit as well, so something also to maybe highlight there. But Ines Ferre, I appreciate you bringing us that update and amusement here even from the man himself, Elon Musk.