Reuters

On Monday, Bill Selesky of Argus Research raised his Tesla price target to $808 from $556, implying the stock could gain another 24% this year.

The price target is now the highest on Wall Street for Tesla.

Shares of Tesla surged 13% on Monday.

Tesla's rally continued after the company posted solid fourth-quarter earnings on Wednesday.

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Shares of Tesla surged 13% on Monday, topping $700 per share for the first time after Bill Selesky of Argus Research raised his price target for the equity to $808 from $556 and reaffirmed his "buy" rating.

That implies a surge of as much as 24% from Friday's close. It's also now the highest Tesla price target on Wall Street, edging out the $800 target from Pierre Ferragu of New Street.

"Our positive view assumes continued revenue growth from the legacy Model S and Model X, as well as strong demand for the new Model 3, which accounted for more than 80% of 4Q19 production," Selesky wrote in a note on Monday.

Selesky said he expected Tesla to benefit from its dominant position in the electric-vehicle industry and continue to improve its performance despite past production delays, part shortages, labor cost overruns, and other difficulties.

Tesla's fourth-quarter financial results, reported on Wednesday, sent the stock higher. The company beat analysts' expectations for quarterly profit and revenue and said its 2020 deliveries would "comfortably exceed" 500,000 vehicles, a jump from the 367,500 vehicles delivered in 2019.

Following the earnings beat, Argus raised its expectations for Tesla's 2020 earnings per share to $8.01 from $5.96, saying it expects that in 2021 earnings per share will nearly double. The forecast assumes a significant increase in vehicle deliveries, slightly higher gross margins, and declining research and development costs, according to the note.

Though Tesla stock has gained 56% year-to-date through Friday's close, "we continue to see significant upside for TSLA based on accelerating revenue trends and strong demand for the new Model 3," Selesky wrote.

Tesla has a consensus price target of $466.78 and nine "buy" ratings, 10 "hold" ratings, and 18 "sell" ratings from analysts covering the company, according to Bloomberg data.

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