A top Wall Street auto analyst is raising his price forecasts for Tesla.

Morgan Stanley’s Adam Jonas told the firm’s clients the Model 3 production ramp is doing better than he expected.

“We update our model with increased Model 3 unit forecasts, improved revenue and gross margin in energy, storage, and other, and (much) higher capex spend following earnings,” Jonas wrote in a note to clients Monday.

Jonas raised his estimate for Model 3 volume to 1,500 cars from 0 cars for Tesla’s fourth-quarter. He also increased his 2018 production forecast for the recently launched electric car to 120,000 from 90,000.

The analyst reiterated his equal-weight rating for the Tesla shares and increased his main price target to $317 from $305. The company’s stock closed at $357.87 Friday.

He also raised his “bull case” forecast for the company to $526 from $511, representing 47 percent upside from Friday’s close.

The latter projection includes a $128 per share value for Tesla Mobility, which is an Uber-like transport service business with autonomous electric vehicles championed by Jonas that may or may not come to fruition.

Both price target “moves are fully explained by an increase in our valuation of the core auto business,” he wrote. “Tesla remains a rather expensive call option on disrupting transport and energy but will (and should) attract serious competition over time – the stock is trading just over our assessment of fair value.”

The electric car maker’s shares are outperforming the market this year. Its shares are up 67.5 percent year to date through Friday compared with the S&P 500’s 9 percent return.

Tesla shares rose 2 percent Monday morning after the call.