Aly Song/ReutersJefferies predicts that Tesla shares will rise 22% in the next 12 months, as earnings growth accelerates.The firm increased its Tesla price target to $850, from $700. It also raised its rating to "buy" instead of "hold".Jefferies sees Tesla also benefiting from increased production.Check out more stories from Insider's business page.Jefferies has upgraded Tesla stock from "hold" to "buy" in a report. They predict that Tesla's share price will rise by 22% over the next 12 month. In light of the broad shift in the automotive industry to electric-vehicle markets, Jefferies cited the firm's accelerating earnings growth as the main driving force.Jefferies increased its price target for Tesla from $850 to $700Automakers will improve their margins by using less capital and more efficiently. Equity analyst Philippe Houchois stated that Tesla is the leader in earnings momentum and capital allocation in a note to clients.Jefferies predicts that Tesla will have a higher demand for electric vehicles powered by battery power in 2022, as well as more assembly and battery capacity. They also expect a wider range of models, including the Tesla S, Cybertruck, and the Tesla S.Tesla shares rose as high as 3% Monday, making them largely flat for the year. The stock's value has fallen significantly from January's record highs.Jefferies said that Tesla shares underwent a healthy rebasing this year, with execution risk and "noise" dominating the investment case. Legacy [original equipment makers] were responding with their own transition plans." Jefferies was referring to rival automakers.Jefferies said that Tesla's second quarter financial results were the strongest and most consistent. This was before it increased its product range. The 2021 and 2022 estimates of Tesla's net earnings after tax were increased by 17%, to $5.5 billion each and $8.03 million, respectively.Jefferies stated that Tesla, with its low model complexity and direct distribution, is the benchmark for capital employed and should be retained for some time even as the range expands (no inheritance to wind down), and the company expands its network physical stores and repair centres.Continue reading: Ether to $14,000 and doge above $1: A CEO of a payment platform explains why ethereum's upgrades could cause a rise in the prices of multiple cryptos. He also shares his predictions for bitcoin and XRP.
