Tesla Corporation (Nasdaq: TSLAAnalyst Daniel Ives first upgraded his rating for the company to Outperform and added the automaker to his top picks.
Tesla analyzer: Ives upgraded the company to Outperform from Neutral and raised its target price from $ 950 to $ 1,000. Ives has a long-term $ 1,300 Thor case goal on Tesla.
Tesla’s thesis: Ives said delivery numbers released on Friday are a “paradigm shift” and indicate that there is “pent-up demand” around the world for the Tesla Model 3 / Y cars, which are reaching the next stage of growth amid a “green tidal”. “
The analyst wrote in a note released on Sunday that Tesla could exceed 850,000 deliveries this year, and there is a target that stretches to 900,000 despite the ongoing chip shortage and supply chain issues plaguing the automotive sector as a whole.
Ives said the “eye catching” delivery numbers from China could not be ignored. There is a track in the pace, he said, indicating that Elon Musk-led company deliveries close to 40% could be in China by 2022.
“We believe Tesla / FCF profitability [Free Cash Profile] The profile improves dramatically over the next 3-4 years with $ 20 in potential annual return by 2026 based on our projections, ”Ives wrote.
The factors that prompted Wedbush to revise its target price and rating include The possibility of removing the ceiling of the domestic tax credit for electric vehicles To which the automaker has already reached. The analyst expects the removal to come as part of Biden’s $ 2.3 trillion infrastructure plan. He thinks the tax credit could be raised to nearly $ 10,000 to boost demand for electric vehicles.
The analyst said that the first quarter handover “drop the microphone” figures that A total of 184,800 vehicles They were way ahead of the estimates and defy the skeptics and the bears. He said strength in the quarter was led by the 3 / Y which was a “jaw drop” at 182,780 units.
Tesla’s strength in Europe and China puts Tesla on a track of over 850,000 delivery units for this year, according to Wedbush.
“With 3% of electric vehicle sales today globally and on track to be 10% by 2025, we believe the electric vehicle market is just beginning to emerge as the automotive sector turns green over the coming years with Tesla taking the lead,” Ives wrote. .
The analyst also pointed out strong New Corporation (New York Stock Exchange: NIO) And Xpeng Corporation (New York Stock Exchange: XPEV) Prepare As an indication that the global demand for electric vehicles is rising.
Price movement: Tesla shares closed 0.93% lower at $ 661.75 on Thursday.
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