Tesla Inc. is set to diversify further into energy generation and storage, according to a Bloomberg report.
- Canaccord Genuity Analyst Jed Dorsheimer upgraded the stock to buy from hold, predicting the generation and storage unit could yield $8 billion in revenues by 2025.
- In a note to clients on Monday, Dorsheimer said Tesla is creating an Apple-esque ecosystem of energy products, harmonized in electrification.
- The analyst set a target price of $1,071 apiece, almost 60% upside for the stock that gained nearly sixfold in the past year.
- The target values the stock and net debt at 63 times his estimate of the company’s earnings in 2024. Shares traded $690.23 in the early morning in New York.
- Dorsheimer said the multiple is warranted as he believes Tesla holds a several-year lead and is now expanding aggressively into storage.
- To meet battery demand, Tesla is tapping available resources, including its Fremont site, a production with partner Panasonic Corp., and supply agreements with LG Chem Ltd.
- Demand for its Powerwall home storage will be met as supply constraints ease. This is often paired with solar installations.