Tesla Should Take Advantage Of Shares Re-Rating 30% Back >$1Trn Since Trump’s Election To Raise Equity

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Wall Street turned uber-bullish on Tesla en masse from the moment it became clear that Trump had secured another stint at the White House, helped along by the pivotal role played by Elon Musk in the presidential campaign. Now, a Jefferies analyst wants Tesla to take advantage of its ongoing stock rally, one that has seen its market capitalization soar above $1 trillion, to raise fresh capital.

Jefferies Raises $TSLA PT to $300 from $195 – Hold

Analyst Comments: “Tesla should take advantage of shares re-rating 30% back >$1trn since Trump’s election to raise equity. Assuming markets remain competitive, de-regulation raises the growth path but also the investment…

— Wall St Engine (@wallstengine) November 14, 2024

Jefferies analyst Philippe Houchois wrote in a new investment note:

“In recent days, Tesla shares have looked like a proxy for Elon Musk’s wider interests on expectations of de-regulation driving growth across separate businesses.”

Although a broad-based deregulation would raise the EV giant’s growth prospects, the analyst believes that it would also increase the capital requirements for Tesla and its competitors.

Moreover, while Tesla has funded itself quite successfully since 2019, 42 percent (or $9.3 billion) of its cumulative free cash flow (FCF) since then has been sourced from ZEV credits, which remain “a less secure source of funds if emission rules change.”

Furthermore,…