Earnings season has created some big winners and big losers this summer, but the major Nasdaq momentum stocks and top tech stocks have seen some selling pressure after earnings. Even the mighty Tesla Inc. (NASDAQ: TSLA) posted great earnings and gapped up in the initial reaction, only to sell off on the same day and then again on the following day as well.

Tesla is a battleground stock in which using traditional valuation metrics has been next to impossible in determining a fair stock price. Founding CEO Elon Musk has defied the normality that most chief executives have adopted when announcing news to the public and communicating with investors. Analysts on Wall Street have been all over the place here, with some still maintaining that Tesla is doomed to see major losses over time as the valuations are just not sustainable.

Many analysts have potential conflicts of interest, as their firms seek to do underwriting and advisory business with many large companies. Those analysts also may have Buy, Sell or Hold ratings for their clients that may conflict with the firm’s positions, trading or operations. Independent research firms, those that do not even buy or sell shares or have underwriting or advisory departments, are often held in a different light. So what happens when one of the prestigious independent research firms says that it’s time to buy Tesla?

Argus now has lifted its formal rating on Tesla to Buy from Hold, based mostly on the strong demand for Tesla vehicles during the pandemic. The firm also issued a price target of $1,888, after the 90,650 vehicles delivered in the second quarter were well above the Argus forecast and the consensus estimate.

Argus has raised earnings expectations too. For 2020, the target was raised to $5.55 per share from $3.02, based on the strong second-quarter results and a full return to production at all of its manufacturing facilities. The much larger boost was for 20201, where Argus raised its estimate to $13.13 per share from $11.15.

Friday’s report pointed out that Musk and company have dealt with production delays, parts shortages and labor costs being above plan and still come this far. The firm sees Tesla continuing to improve on its performance, and it also noted that the company will benefit from an “unrivaled brand reputation in the electric vehicle industry.”

Tesla’s earnings beat has been covered in detail, but Argus noted that the swing to profitability reflected higher deliveries for its Model 3 and Model Y, as well as lower operating expenses, lower research and development expenses and better revenues from auto leases. More impressive was that these improvements were there even with its main production plant in Fremont, California, being closed for six weeks. Overall deliveries declined 5% from the prior year, but this was also due to the Fremont plant closure.

Even though the revenue was down 5%, the automotive division revenues were down 4%, with the larger percentage drop being seen from “Services and Other” revenue categories due to the Fremont plant shutdown. Another highlight was that Tesla’s gross margin rose to 18.7% from 17.2% a year earlier, mainly driven by higher average selling prices for the Model 3 Standard Range Plus model.

One bright spot for Tesla was in the Energy Generation and Storage revenues. This segment saw revenues rise to $349 million from $326 million the prior year. Tesla had cited higher storage deployments of both its Powerwall and its new 3MWh energy storage Megapack. Tesla already had moved the Powerwall production from its Fremont plant to the Gigafactory in Nevada long before the problems of 2020 were known.

Establishing a formal price target for Tesla comes with challenges, but Argus used the following valuation metrics to generate a $1,888 price target:

• Tesla shares have traded between $211 and $1,794 over the past 52 weeks.
• Its shares are trading at 272 times Argus’s 2020 EPS forecast.
• Its shares are trading at 115 times Argus’s 2021 EPS forecast.
• The eight-year average annual range has been 57 to 113 times EPS forecasts.
• Shares are valued at a trailing price-to-book multiple of 18.2, versus a historical range of 15.7 to 51.3.
• It is valued at a price-to-sales multiple of 5.2 times, under the historic range of 6.1 to 16.9.
• Its price-to-cash flow multiple of 51.1 is below the midpoint of A 41.7 to 62.1 historical range.

Despite the strong stock gains and the high valuations against earnings, Argus’s view for even more upside ahead is based on Tesla’s improving production outlook and on accelerating demand for Tesla vehicles.

In an effort to keep some balance and to show just how wide the range of analysts are on Tesla, it is important to consider that not everyone agrees with Tesla’s bullish case. Some analysts have been crushed because of keeping much lower price targets and negative ratings. Other analysts are even more bullish than Argus’s $1,888 target price. Here are some of the updated target prices and ratings seen since Tesla’s earnings report this week:

• Canaccord Genuity: Reiterated Hold, but target raised to $1,623 from $650.
• Cowen: Raised to Market Perform from Underperform and target raised to $1,100 from $300.
• Daiwa: Downgraded to Neutral from Outperform and target raised to $1,650 from $1,500.
• Deutsche Bank: Reiterated as Hold but target raised to $1,500 from $1,000.
• Goldman Sachs: Reiterated as Neutral but target raised to $1,475 from $1,300.
• Oppenheimer: Reiterated as Outperform and target raised to $2,209 from $968.
• Piper Sandler: Reiterated as Overweight and target raised to $2,400 from $2,325.
• RBC Capital Markets: Maintained as Underperform but target raised to $850 from $765.
• Wedbush Securities: Reiterated as Neutral but target raised to $1,800 from $1,250.

Remember that no single analyst call should ever be used as the sole basis for deciding to buy or sell a stock.

Tesla shares traded down 4% at $1,449.50 on Friday shortly ahead of the noon hour. Its market cap is roughly $269 billion.

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