What happened

Shares of Tesla (NASDAQ: TSLA) roared out of the gate Monday morning and were up 7.1% at 10:55 a.m. EST, boosted by a bullish analyst note from investment bank Wedbush over the weekend.

It's not a surprise that investors are excited: As multiple news outlets are reporting, Wedbush set a $1,000 "bull case" target price on Tesla stock, apparently predicting that it will double off of Friday's closing price of $489 and change.

Image source: Tesla.

So what

Here's why that enthusiasm might be misplaced: It is true that Wedbush said that Tesla stock could hit $1,000 in 12 months -- if everything goes right for the company.

Demand for Teslas has been "Teflon-like" this year, said the analyst, adding that Tesla is the undisputed leader in electric vehicles worldwide, with better "production capabilities, battery technology/innovation, and brand awareness" than any of its rivals.

Tesla is growing sales and enjoying strong profit margins on its revenue from selling software-driven upgrades that go "right to the bottom-line," Wedbush said, and stands to reap additional profits from a Biden administration that the analyst expects to push EV tax credits and incentives.

The stock could reach $1,000 by the end of next year if all of these things continue to go right for Tesla: sales keep growing and rival car companies like Ford, GM, Nio, and XPeng don't eat into its market share; Tesla's profit margins keep growing; and the U.S. government showers more tax rebates upon its customers.

Now what

But that's only one possibility.

And Wedbush isn't so certain that all of this will happen, as media headlines suggest. After reviewing a copy of the analyst's report, provided by TipRanks.com, perhaps the most interesting thing I found was that Wedbush's base-case scenario for Tesla actually envisions a price target of only $560 (less than 8% above where Tesla trades today). That $1,000 target was only the analyst's best-case scenario for what might happen.

Before you assume that $1,000 will in fact happen, and rush out to buy Tesla stock, consider this: Wedbush ended up assigning Tesla stock not a buy rating, but a neutral.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.