Piper boosts Tesla target to $928 from $729 after installing solar system

Piper Sandler analyst Alexander Potter raised the firm's price target on Tesla to $928 from $729 and keeps an Overweight rating on the shares. The stock closed Tuesday up $58.37 to $858.40. The analyst says that in order to gauge Tesla's chances of success at storing one's own solar power, he recently installed a solar system to use for charging a Model X. It's easy to forget that Tesla sells batteries and solar power products as the segment was only 6% of sales in 2019, Potter tells investors in a research note. Management says that the solar and storage business will one day rival the automotive segment, and if this is true, "then investors will eventually need to pay attention," contends the analyst. With 5M new rooftops installed annually in the U.S., Potter estimates addressable market for Tesla's integrated solar roof is $165B per year. Adding two Powerwalls to each new solar roof would boost the market size by $70B per year, he adds. After logging 53,448 miles on a Model X, the analyst is "convinced that Tesla's automotive products offer a superior ownership experience." Potter goes on, "If history is any indication, we'll eventually be saying something similar about generating and storing our own solar power." The analyst says his new price target on partially capture Tesla's solar and storage opportunity in his 20-year discounted cash flow model.