When it came to deliveries, Telsa (TSLA) delivered. Last week, the electric car maker announced that quarterly deliveries hit a new record.
As a result, Deutsche Bank analyst Emmanuel Rosner bumped up his Q3 revenue forecast from $8.2 billion to $8.5 billion, and believes deliveries for the full year will be higher than he originally expected.
It should be noted that following the company’s Battery Day event, the analyst upgraded the rating to Buy, recommending that investors “use any deliveries-related stock weakness to accumulate Tesla shares ahead of significant growth acceleration in Q4 and 2021.”
Expounding on the company’s prospects, Rosner commented, “Expectations into the event were high, but Tesla in our view showcased impressive trajectory for its technology, capacity and especially cost that should help accelerate the world’s shift to electric vehicles and extend its lead considerably.”
Rosner highlights the fact that investors are skeptical about the targeted timeline (three-years) to realize the full benefits of the 56% in cost savings, and were somewhat disappointed TSLA did not provide more details on the “million-mile” battery and future battery technology. That said, the analyst thinks Tesla’s plan is a “bold new attempt to inflect down battery costs much faster than their current trajectory, which could give Tesla a large competitive advantage.”
To this end, the focus is now expected to shift to the near-term volume and demand trends as well as the Presidential election in November, in Rosner’s opinion. “Overall, history strongly suggests potential for material autos stock outperformance after the November election, regardless of which candidate wins,” he explained. If Biden wins, he argues “outperformance could be tilted towards stocks most exposed to vehicle electrification, and in particular TSLA.”
In line with his optimistic approach, Rosner rates TSLA stock a Buy along with a $500 price target. Investors could be pocketing a gain of 17%, should this target be met in the twelve months ahead. (To watch Rosner’s track record, click here)
Turning to the rest of the Street, other analysts are more cautious. With 6 Buys, 14 Holds and 10 Sells assigned in the last three months, the word on the Street is that TSLA is a Hold. At $316.69, the average price target implies 26% downside potential from current levels. (See Tesla stock analysis on TipRanks)
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