The stock of electric vehicle maker Tesla (TSLA) has gotten a big price target boost from Jefferies Financial Group (JEF).
The Wall Street firm has raised its price target on Tesla’s stock to $300 U.S. from $195 U.S., an increase of 54%.
Despite the big increase, Jefferies maintained a Hold rating on Tesla stock and suggested that the automaker use the current rally in its share price to raise equity.
Raising equity would require Tesla to issue more stock, which would dilute existing shareholders and is viewed negatively by analysts and investors.
However, Jefferies noted that about half of Tesla’s current net cash position of $26 billion U.S. includes capital that was last raised in 2020.
In a note to clients, the analysts said that raising equity would provide Tesla with an edge “…as investment needs and competition step up across multiple business units…”
Tesla’s stock has risen 25% since Donald Trump won the U.S. presidential election on Nov. 5. The rally has lifted Tesla’s market capitalization to $1 trillion U.S.
However, at $313 U.S., Tesla’s share price is now above the price targets of most analysts on Wall Street, including Jefferies upwardly revised price target.
Tesla’s stock has gained 25% year-to-date, with nearly all of that increase coming in the last week. The company’s share price is currently at $311.18 U.S.