Oppenheimer raised its price target for Tesla Inc. to $612 a share from $385 per share on Jan. 13.
Oppenheimer analyst Colin Rusch said the 12- to 18-month price target was raised because Tesla "has reached critical scale sufficient to support sustainable positive [free cash flow]."
Shares of the electric car company were up 8.07% at $516.64 during afternoon trading Jan. 13 after hitting $500 per share for the first time.
The automaker's tolerance to risk, ability to learn from mistakes and larger ambition than its peers are posing a threat to other automakers that are not innovating quickly, Rusch wrote in a research note.
"We believe TSLA's powertrain technology, power/data architecture, and operating system are tracking ~three years ahead of competition based on available vehicles and checks on new platforms," Rusch said. "Given the resolution of manufacturing bottlenecks and demonstration of strong consumer demand, we believe TSLA is becoming a must-own stock and could benefit from inclusion in additional indexes."
Rusch said the price target applies a multiple of 30x to Oppenheimer's 2024 non-GAAP EPS estimate of $28.67, discounted three years at 12%.