Piper Sandler analyst Alexander Potter raised his price target for Tesla (TSLA) to $553 from $423 after analyzing the company's potential in China.
The shares closed Thursday down $10.80 to $481.34.
If Tesla's Model 3 market share in the United States can be replicated in China, and if this logic extends also to Model Y, then Tesla's annual volume in China alone would eventually exceed 650,000 units, Potter tells investors in a research note.
The analyst says that while he's not sure Tesla can immediately replicate its U.S. success in China due to the strength of German brands in China, he's increasing his estimates nonetheless. He now expects China deliveries of 112,000 in 2020, 225,000 in 2021, and 399,000 in 2022.
Potter keeps an Overweight rating on Tesla shares.
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