(Bloomberg) — Tesla Inc.’s potential success in energy generation and storage will be the next big thing to fuel the rally that’s already caused the stock to almost triple in the past year, analysts at Piper Sandler Cos. said as they increased their price target by more than 27%.

Piper raised its target to $928 from $729, making it the most bullish estimate among among those tracked by Bloomberg. The shares — which have more than doubled in the past four months — rose 8.1% in pre-market trading and are set to surpass the record high close of $887.06 reached Feb. 4.

“It’s easy to forget that TSLA sells batteries and solar power products; after all, the segment was only 6% of sales in 2019,” analysts Alexander Potter and Winnie Dong wrote in a note Tuesday. “But management says that the solar+storage business will one day rival the Automotive segment, and if this is true, then investors will eventually need to pay attention.”

In order to gauge Tesla’s chances of success in generating and storing solar power, the analysts recently installed a solar-based system to use for charging a Model X and the results have been “illuminating” so far, they wrote in the note. Piper’s new price estimate implies an 8.1% advance from the last close.

The brokerage raised its Tesla target price twice in January, citing in part the company’s growth potential in China.

The electric-car maker started delivering its China-built Model 3 sedans to local customers last month, a year after its first factory outside the U.S. broke ground. Last year, Tesla delivered a record 367,500 vehicles globally.

The shares gained 7.3% on Tuesday after analysts at Morgan Stanley and Sanford C. Bernstein boosted targets. While Morgan Stanley’s Adam Jonas reiterated his sell-equivalent recommendation, he nearly doubled his bull case for the shares, citing Tesla’s potential to become a key battery supplier for electric vehicles.

(Updates to include pre-market trading in second paragraph, context in last paragraph.)

–With assistance from Dana Hull and Beth Mellor.

To contact the reporter on this story: Lianting Tu in Singapore at [email protected]

To contact the editors responsible for this story: Chris Nagi at [email protected], Margo Towie, Cecile Vannucci

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