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Tesla stock is 'very fully priced,' says investing legend Byron Wien

·Anchor, Editor-at-Large
·3-min read
In this article:
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Blackstone’s Byron Wien has made his legendary career on Wall Street by capitalizing on mispriced opportunities in the market using tried and true fundamental stock analysis.

And on that score, the vice chairman of Blackstone’s private wealth solutions group thinks shares of Tesla (TSLA) right now sport the valuation that accurately reflects the company’s future potential. “I think Tesla is very fully priced,” Wien told Yahoo Finance Live. “The question is how long will it take them to sell enough cars to justify their present market value?”

Tesla fanatics continue to wager aggressively on just that very question.

Shares of the electric vehicle maker have come out of the gate blasting in 2021, up a cool 20.1%. The advance has brought the one-year gain on Tesla’s stock to an eye-popping 708%. By comparison the S&P 500 — which Tesla joined on Dec. 21 after several quarters of profits — is up marginally in 2021.

In the process of the stock’s latest run-up, CEO Elon Musk became the world’s richest person on Jan. 7. At a market cap of $805 billion, Tesla is now valued at more than Facebook at $708 billion — despite the latter’s more predictable business and history of solid profits. The combined market caps of Ford, General Motors, Volkswagen and Fiat Chrysler stands at $246 billion, according to Yahoo Finance Premium data.

SHANGHAI, CHINA - JANUARY 04: A Model X vehicle is seen at a Tesla flagship store on January 4, 2021 in Shanghai, China. (Photo by Gao Yuwen/VCG via Getty Images)
SHANGHAI, CHINA - JANUARY 04: A Model X vehicle is seen at a Tesla flagship store on January 4, 2021 in Shanghai, China. (Photo by Gao Yuwen/VCG via Getty Images)

Even with Tesla’s stratospheric valuation (as Wien hints at) built on stratospheric expectations for the future of electric and autonomous cars, the Wall Street bulls on Tesla remain well-entrenched.

“Overall we are seeing a major inflection of EV demand globally with our expectations that EV vehicles ramp from ~3% of total auto sales today to 10% by 2025. We believe this demand dynamic will disproportionately benefit the clear EV category leader Tesla over the next few years especially in the key China region which we believe could represent ~40% of its EV deliveries by 2022 given the current brisk pace of sales with 150k+ deliveries in its first year out of the gates with Giga 3,” says Wedbush tech analyst Dan Ives.

Ives has a bull case price target of $1,000 on Tesla’s stock, or 25% above current levels.

Meanwhile, the stock’s melt-up has begun to attract a legion of Tesla doubters into the bull camp. The stock has caught several upgrades this year, only serving to fuel the speculative fervor.

Credit Suisse analyst Dan Levy recently marked up his price target on Tesla’s stock by $400 to $800. He says the upgrade reflects a company that has proven adept at raising capital, boosting margins and managing investor expectations.

Over at RBC Capital Markets, long-time Tesla bear Joseph Spak conceded this month he has been “completely wrong” on the stock. Spak hiked his rating on Tesla shares to Sector Perform and boosted the price target to $700 from $339.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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