Actions of Tesla (NASDAQ: TSLA) are up sharply again, after gaining 8% on Tuesday. The electric carmaker’s stock is on the rise following Morgan Stanley analyst Adam Jonas’ decision to increase its price target on the stock to $ 180.
As of 11:36 a.m. EST, growth stock is up 5.2%.
Jonas now has a 12-month price target of $ 540 on Tesla shares, up from a previous target of $ 360. The analyst’s heightened optimism about the stock comes as he adds revenue from connected vehicle software and services to his forecast for the company. The present value of future profits from connected vehicle software and services alone is worth $ 160 per share, argues Jonas.
The analyst changed his rating on the stock from an equal weight to an overweight – the equivalent of a buy rating.
Equities may also benefit today from further market optimism following yesterday’s announcement that the stock will soon be included in the market. Indice S&P 500.
Tesla is certainly optimistic about the sales potential of its software. The automaker believes it will eventually be able to release a live software update to its vehicles that will make them fully autonomous. Indeed, Tesla has already released an autonomous driving beta for some of its vehicles. However, this beta software required pilots to be ready to get behind the wheel at all times.
Tesla plans to increase the price of its “autonomous” autopilot option as it improves and new features are released. There is even speculation that the company is considering switching to a subscription model for the software.