Tesla gets two price target hikes ahead of Tuesday's Battery Day

Published Wed, Sep 16 20209:57 AM EDTUpdated Wed, Sep 16 20204:08 PM EDT

(This story is for CNBC PRO subscribers only.) Tesla's widely-anticipated Battery Day is coming up on Tuesday, Sept. 22, and analysts are raising their targets ahead of the event. "While media and investors' expectations for the event are high, we believe these announcements could meet many of them, and reinforce Tesla's position as a technology leader," Deutsche Bank said in a note to clients Wednesday, while raising its target on the stock to $400 from $280. Credit Suisse also raised its forecast on Wednesday — from $280 to $400 — calling batteries "Tesla's pillar of growth for the next two decades." Both firms maintained their neutral-equivalent ratings, however. And despite the substantial increases to each of their targets, Tesla closed at just under $450 per share on Wednesday, meaning each analyst believes the stock has gotten ahead of itself. Still, the battery day could be a market-moving event for the stock. Elon Musk himself has stoked optimism, tweeting on Sept. 11 that "many exciting things will be unveiled on Battery Day." "We believe Tesla could unveil a new insourced manufacturing system to ramp up battery capacity, improved cell chemistry with greatly-enhanced performance, and fast-declining cost curve," Deutsche Bank's Emmanuel Rosner wrote, while Credit Suisse's Dan Levy said he expects "Battery Day to effectively be 'Master Plan Part 3.'" Shares of Tesla have surged more than 430% this year, but the eye-popping number does disguise periods of volatility, including recently. The stock finished last week nearly 11% lower after shares dropped 21% during one trading session — the stock's worst day on record — after Tesla wasn't added to the S & P 500 despite widespread speculation that it would be. Additionally, earlier in September the company's largest outside shareholder cut its position, and Tesla also announced a $5 billion stock offering, both of which pressured shares. But the stock has since bounced back, and is now about 10.5% below its all-time intraday high of $502.49 from Sept. 1. Tesla skeptics, of which there are many, argue that the stock's valuation is detached from the underlying fundamentals. They point to seemingly baseless jumps, such as when shares surged on the back of Tesla's 5-for-1 stock split announcement, as indication that the electric vehicle company trades on emotion rather than tangible metrics like earnings growth. While Deutsche Bank and Credit Suisse remain on the sidelines when it comes to Tesla, both acknowledged the company's appeal for investors. "We believe investor ongoing enthusiasm for EV plays and the expected confirmation of ongoing technology lead by Tesla, could continue to support its high valuation," Rosner said. "Even if Tesla provides overly ambitious aspirations at Battery Day, we nevertheless expect the event to reinforce Tesla's long-term growth narrative – central to the stock, while also reinforcing investor perception that Tesla is ahead of other automakers," Credit Suisse noted. Shares of Tesla fell 1.78% on Wednesday. - CNBC's Michael Bloom contributed reporting.

A Tesla Model S is displayed during the London Motor and Tech Show at ExCel on May 16, 2019 in London, England.

John Keeble | Getty Images

(This story is for CNBC PRO subscribers only.)

Tesla's widely-anticipated Battery Day is coming up on Tuesday, Sept. 22, and analysts are raising their targets ahead of the event.

"While media and investors' expectations for the event are high, we believe these announcements could meet many of them, and reinforce Tesla's position as a technology leader," Deutsche Bank said in a note to clients Wednesday, while raising its target on the stock to $400 from $280.

Credit Suisse also raised its forecast on Wednesday — from $280 to $400 — calling batteries "Tesla's pillar of growth for the next two decades."