It’s a good time to be Elon Musk.
Shares of the billionaire’s Tesla Motors Inc. have surged 40 percent since Dec. 1, putting the stock within reach of a 52-week high. The acquisition of SolarCity is complete. Musk’s sprawling Gigafactory is now producing battery cells. And the clean-energy evangelist has the ear of a surprising fellow in Washington: President Donald Trump.
It’s a big turn of fortune from 2016, when skepticism was mounting that Musk could juggle his ambitious goals. Tesla’s shares crossed above analysts’ 12-month price target as of this week and are trading at about $254, the highest since April. One reason for the surge -- progress toward production of the mass-market Model 3 electric car by year-end -- has also burnished Musk’s appeal as an adviser to the new president.
“Tesla is a poster child for Made in the USA, and the one thing that is a clear focus for Trump is creating manufacturing jobs,” said Ben Kallo, an analyst at Robert W. Baird. “Investors want to own the stock ahead of the Model 3 launch.”
Palo Alto, California-based Tesla’s cars are all produced in the U.S., so Trump’s threats to tax imports could be a boon to the maker of electric vehicles and energy storage devices. Tesla, which has 25,000 workers in the U.S., builds vehicles in Fremont, California; its Gigafactory lies in a Republican congressional district in Nevada; and it has partnered with Panasonic Corp. to produce solar cells and panels beginning this summer in Buffalo, New York. The rockets launched by his closely held Space Exploration Technologies Corp. are all made at SpaceX headquarters in Hawthorne, California.
Trump Adviser
Musk was one of a dozen chief executive officers who met with Trump at the White House Monday to talk manufacturing, taxes and trade. He serves on the president’s economic advisory board and regularly meets with either Trump or his top aides.
“Elon Musk has an important line of communication to Donald Trump,” Morgan Stanley analyst Adam Jonas wrote in a note last week as he raised his price target to $305 from $242. “This strategic relationship between Tesla leadership and the new administration is an important development.”
Tesla was little changed on Wednesday at $254.47, about $9 above analysts’ average price target. It’s approaching the 52-week closing high of $265.42, set April 6, and is about $30 from the closing peak set in September 2014. Analysts remain split on its prospects, with eight calling it a buy, 10 a hold, and six a sell.
The Odd Couple