RBC Capital Markets analyst Joseph Spak ended his negative call on Tesla Inc. shares. TSLA,
On Thursday, with an update of the sector’s performance from underperformance. Tesla shares rose 2.9% in premarket trading on Thursday. “There is no graceful way to put this other than to say that we have completely erred in TSLA’s actions (even if our fundamental point of view so far has not been too far),” he wrote in a note to clients. . “Our biggest miss was how TSLA can take advantage of its share price to raise cheap capital and fund spending and capacity building.” He said that this dynamic allows Tesla to easily finance its future growth, while traditional car manufacturers will have to rely on considerable cash from their current operations to finance their ambitions for electric vehicles. “In short, the higher stock price is somewhat self-fulfilling compared to TSLA’s growth potential,” he wrote. In addition, Tesla’s stock is “the latest sentimental pendulum,” according to Spak, and the company serves as a “poster child” for electric vehicles at a time when the momentum of the category is booming in many regions. Finally, Spak set a sectoral performance rating on shares, saying that “its current valuation involves high growth assumptions and strong execution”. He raised his price target to $ 700 from $ 339 in his customer rating. Tesla shares have gained 78% in the last three months as the S&P 500 SPX,
added about 10%.