Elon Musk, the billionaire founder of Tesla Motors who overtook Jeff Bezos as the world's richest person last month, could see his fortune swell to almost $270 billion if the electric vehicle maker hits a target price of $1,200 per share forecast by a technology analyst, who predicted a surge in the company's shares last year.
Mr Musk, who owns about 20 per cent of the company's 947.9 million shares, is currently worth $194.8bn, according to the Bloomberg Billionaires Index. He also sits on around $42bn of unrealised paper gains on vested stock options, received in 2012 and 2018.
“2020 was a breakout year for Tesla, but in our view, the fireworks aren't over. Even after a 10 times' return over the past 12 months, we don't think investors should be selling this stock,” Alex Potter, a senior research analyst at US investment bank Piper Sadler said in a note to clients.
Tesla's stock closed 5.8 per cent higher at $839.80 per share on Monday. The company's shares have climbed almost 440 per cent in the past 12 months and more than 15 per cent since the start of this year.
Mr Potter, who specialises in transportation technology with a keen focus on EVs and automotive e-commerce, raised his target price on Tesla to $1,200 based on model mapping out the cash flows it expects the company to generate over the next 20 years. The new target is a substantial increase on a previous target of $515 set in September, when the company was trading at about $430 per share.
At $1,200 a share, he is valuing Tesla at about $1.1 trillion. The company's current market capitalisation stands at $796bn.
On Monday, Morgan Stanley analyst Adam Jonas also raised his price target on Tesla to $880 from $810 a share. He pegged this growth on increasing revenue from the company's automotive business and likely gains in its energy arm, which produces storage batteries.
Tesla, which generated about $2.8bn in free cash flow last year, is forecast to have nearly $37bn in free cash flow by 2025.
In an earnings call last week, the California-based company said it aims to deliver more than 750,000 cars this year. However, bullish Piper Sandler analysts expect 894,000 vehicle deliveries in 2021, which they project will increase to more than 9 million units in 2030.
“This level of production would rank Tesla among the top three auto makers globally. More important still, we anticipate a steady ramp in full self-driving software adoption starting in 2030 … this should have a big impact on margins,” Mr Potter said.
Tesla, which joined the S&P 500 index in December, delivered 57,039 Model X and Model S units, about 11 per cent of its total handovers, last year. It sold 442,511 units of the Model 3 and Model Y last year.
“Model S and Model X established Tesla’s brand, but financially, they are growing less relevant,” Mr Potter said.
“By the mid-2030s, the average Tesla should be approaching $30,000. Some models may be priced much lower than this. This reflects a mix shift toward new [cheaper] products, as well as price cuts on existing models.”
Lower average selling prices support the company’s long-term goals.
Tesla’s ASP of vehicles declined nearly 11 per cent in the last quarter, as the company’s product mix continued to shift to the more affordable Model 3 and Model Y.
Among EV manufacturers, Tesla continued to dominate 2019 as market leader. It accounted for 16 per cent of the market, compared with a 12 per cent share in 2018, according to McKinsey’s EV index.
The growing popularity of electric vehicles fuelled a 157 per cent year-on-year increase in fourth quarter profit for Tesla. Net profit rose to $270 million in the three months to December 31.
MATCH INFO
Everton 2 (Tosun 9', Doucoure 93')
Rotherham United 1 (Olosunde 56')
Man of the Match Olosunde (Rotherham)
New schools in Dubai
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1st Test: Brisbane, Nov 23-27
2nd Test: Adelaide, Dec 2-6
3rd Test: Perth, Dec 14-18
4th Test: Melbourne, Dec 26-30
5th Test: Sydney, Jan 4-8
Elvis
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Director: Mahdi Fleifel
Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa
Rating: 4.5/5
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F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Email sent to Uber team from chief executive Dara Khosrowshahi
From: Dara
To: Team@
Date: March 25, 2019 at 11:45pm PT
Subj: Accelerating in the Middle East
Five years ago, Uber launched in the Middle East. It was the start of an incredible journey, with millions of riders and drivers finding new ways to move and work in a dynamic region that’s become so important to Uber. Now Pakistan is one of our fastest-growing markets in the world, women are driving with Uber across Saudi Arabia, and we chose Cairo to launch our first Uber Bus product late last year.
Today we are taking the next step in this journey—well, it’s more like a leap, and a big one: in a few minutes, we’ll announce that we’ve agreed to acquire Careem. Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha. I’ve gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary. They are first-class entrepreneurs who share our platform vision and, like us, have launched a wide range of products—from digital payments to food delivery—to serve consumers.
I expect many of you will ask how we arrived at this structure, meaning allowing Careem to maintain an independent brand and operate separately. After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.
This acquisition is subject to regulatory approval in various countries, which we don’t expect before Q1 2020. Until then, nothing changes. And since both companies will continue to largely operate separately after the acquisition, very little will change in either teams’ day-to-day operations post-close. Today’s news is a testament to the incredible business our team has worked so hard to build.
It’s a great day for the Middle East, for the region’s thriving tech sector, for Careem, and for Uber.
Uber on,
Dara
MATCH INFO
Europa League final
Who: Marseille v Atletico Madrid
Where: Parc OL, Lyon, France
When: Wednesday, 10.45pm kick off (UAE)
TV: BeIN Sports
Ferrari 12Cilindri specs
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GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
'Nope'
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