JMP says the recent market pullback could offer investors a chance to buy shares in a carmaker that could soon churn out 1.8 million units each year.

Tesla Inc. (TSLA) - Get Report shares jumped higher Tuesday after analysts at JMP Securities lifted their rating on the clean energy carmaker to "outperform", arguing investors will be able to buy the stock cheaply amid the ongoing market upheaval linked to the coronavirus.

JMP said its new price target of $1,060 per share, one of the highest on Wall Street, implies earnings multiple that "may seem excessive", but argued that with investors still happy to buy unprofitable automakers at lower multiples, Tesla is growing at a compound annual rate of 23%. Based on 2021 estimates, JMP said, Tesla is valued at around 20 times forecasted earnings -- compared to around 18.2 times for the S&P 500 -- and could churn out nearly 2 million vehicles a year by 2025.

"The recent market-driven pullback provides investors with a good opportunity to enter the stock in our opinion, and a perusal of offerings from competitors suggests that Tesla’s market position should continue to be dominant," said JMP's Joseph Osha. Investors may find themselves with additional near-term opportunities to buy the stock as Tesla works through the first half of 2020 and the impact of COVID-19 becomes apparent."

"Interestingly enough, revisions to our 2021 model put us only moderately above consensus, but a look at the longer-term potential for TSLA’s growth suggests the stock should be more highly valued on the 2021 outlook than it currently is," he aded.

Tesla shares were marked 5% higher in early Tuesday trading to change hands at $779.83 each.

Tesla shares have lost around 20% of their value since markets peaked on February 19 and investors began to dump risk assets in the face of advancing coronavirus infections. That compares to an 8.7% decline for the broader S&P 500.

Last month, Tesla priced its 2.65 million stock offering at $767 per share, a level that valued the Palo Alto, California-based carmaker at $145.8 billion. Tesla's market value at the close of trading Monday was pegged at $136.91 billion.

Tesla shares, however, have risen rose from 418.33 at the start of the year to a record high $968.98 each on February 4 following the group's fourth quarter earnings, which rose 10.9% from the same period last year to $2.06 per share, smashing the Street consensus forecast of $1.75.

Group revenues also impressed, rising 2.1% to $7.38 billion and edged past analysts' estimates of a 7.05 billion tally.

Tesla also topped the lower end of Wall Street forecasts for 2019 deliveries with a full-year tally of 367,500 units, lead by the sale of 92,500 Model 3s over the three months ending in December.