A longtime Tesla bull hiked his Tesla Energy value model Wednesday, while also reducing how much value the EV giant's auto business is bringing to the stock's price. This comes after several analysts called Tesla's Q2 energy storage numbers last week the big winner from its delivery results.
Adam Jonas, Morgan Stanley's high-profile auto analyst, kept his Tesla stock price target of 310 unchanged Wednesday, but increased Tesla Energy to $50 per share, up from his previous $36 per share view. That comes out to a $183 billion business.
Jonas has upped his view on Tesla Energy based on increased annual revenue growth projections and expectations that gross margins will hit 26% in 2030 vs. the previous 23% prediction.
Jonas wrote Wednesday that as generative artificial intelligence (Gen AI) increases energy demand, there is an "increased interest" in Tesla's energy business. The analyst previously has said that Tesla Energy is "uniquely positioned to benefit from investment in the U.S. electrical grid accelerated by the AI boom."
Meanwhile, Jonas also cut his valuation on Wednesday of Tesla's auto segment by $15, bringing it to $56 per share. Jonas sees reduced battery electric market penetration by 2030 and "continued EV deceleration in the wake of China protectionism and a hybrid renaissance."
The analyst also projects Tesla Energy margins will surpass the company's auto margins in 2024 and that by 2030 Tesla Energy can generate EPS of $2.00.
Separately, Goldman Sachs raised the its Tesla price target to 248 from 175 to 248, but kept a neutral rating. The firm also upped its 2024 earnings estimate, reflecting higher deliveries.
Tesla stock gained 0.8% to 265.40 during market action on Thursday, after booking an 11th consecutive advance on Wednesday.
Energy Storage In Q2
The decision by Jonas to reconfigure his view on Tesla's energy segment comes after the EV giant reported last week that it deployed 9.4 gigawatt-hours (GWh) of energy storage products in Q2. That more than doubled the prior high of 4.053 GWh in Q1.
Tesla currently offers solar panels and a solar roof, along with Powerwalls for energy storage. On the commercial side, Tesla also offers the "megapack."
Chief Executive Elon Musk said during Tesla's June 13 shareholder meeting that the company is "tracking" toward 200%-300% year-over-year growth in energy storage and deployment of stationery pack.
Tesla Stock Performance
TSLA shares popped 3.7% on Tuesday to 262.33 as shares have surged more than 40% in an 11-day win streak, the longest run since a string of 13-consecutive gains in June 2023.
Last week, Tesla stock skyrocketed 27.1% to 251.52, moving above the stock's 200-day moving average as Q2 deliveries fell vs. a year earlier but beat lowered expectations.
Shares are now greatly extended from the 191.08 from handle buy point, according to MarketSurge chart analysis. That buy range extended to 200.63.
TSLA stock is right at a long-term trendline going back to its late 2021 all-time high. Ideally, Tesla would pause for a while.
In June, shares gained more than 11%. Tesla shareholders recently voted in favor of giving Musk his 2018 $56 billion pay package and reincorporating the EV giant in Texas, moving it from Delaware.
With the annual meeting wrapped up, analysts are looking to Tesla's second-quarter earnings on July 23. The company will also hold a robotaxi event on Aug. 8.
Tesla stock ranks third in the 35-member IBD Auto Manufacturers industry group. The stock has an 89 Composite Rating out of a best-possible 99. Shares have an 89 Relative Strength Rating and a 62 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
YOU MAY ALSO LIKE:
Is Tesla Stock A Buy Or A Sell?
Get Full Access To IBD Stock Lists And Ratings
Learning How To Pick Great Stocks? Read Investor's Corner
Is Rivian A Buy Right Now After It Launched Its New Product Line?
Tesla 10-Day Win Streak: 44% Spike, $250 Billion Market Cap Hike
Futures: Inflation Report Due; Market Flashes Biggest Warning In A Year
