Analysts mostly remained positive on Tesla Inc’s (NASDAQ: TSLA) prospects by lifting their price targets.
Related Content: Tesla Q4 Deliveries Beat Consensus By A Mile, Pushing Annual Sales To Nearly 1M
Oppenheimer analyst Colin Rusch noted that Tesla posted substantial upside to delivery expectations for Q4 as the company managed supply chain headwinds better-than-expected and sold into a robust demand environment.
Model 3/Y deliveries led the upside, which Rusch believes was, in part, driven by solid sell-through in China. He sees gross margin as a critical focus for Q4 results along with the cadence of incremental self-driving feature roll-out and progress on its Berlin and Austin factory ramps.
Rusch expects Tesla’s record volumes to translate into solid margins. Rusch has an Outperform rating.
Evercore ISI analyst Chris McNally raised the price target on Tesla to $900 from $750 (21.7% downside) and kept an In-Line. McNally believes the auto industry will not return to “normalized inventory” levels until 2024.
Barclays analyst Brian Johnson raised the price target on Tesla to $325 from $300 (71.7% downside) and kept an Underweight.
Tesla’s Q4 production and deliveries update indicates the company is “hitting its stride” as China drives upside to production. The analyst raised estimates on an increased production and deliveries outlook but expects Tesla’s margins to compress as new factories ramp.
Mizuho analyst Vijay Rakesh raised the price target on Tesla to $1,300 from $950 (13.1% upside) and kept a Buy. 2022 “should be a big year” for EV makers, Rakesh tells.
Tesla announced December quarter deliveries of 308,600 units, up 71% year-over-year and almost 20% above consensus.
Higher China volumes in Giga Shanghai for domestic delivery and exports boosted Tesla, Rakesh contends. He sees more robust Tesla deliveries “positioning for upside” in 2022.
Rakesh continues to see “vertically-integrated” EV companies Tesla, Rivian Automotive Inc (NASDAQ: RIVN), and NIO Inc (NYSE: NIO) well-positioned with secular growth drivers as legacy automakers “struggle to balance” their internal combustion engine and EV portfolios. He reiterates the Buy rating on all three companies.
Morgan Stanley analyst Adam Jonas rounds out his top five picks in U.S. autos with Rivian, FREYR Battery (NYSE: FREY), Tesla, and General Motors Co (NYSE: GM), on which he has Overweight ratings.
Daiwa analyst Jairam Nathan raised the price target on Tesla to $1,150 from $1,050 (fair priced) and kept a Neutral.
Nathan increased earnings estimates to reflect a “faster delivery ramp-up” post the better than expected Q4 deliveries. The 29% sequential increase in Q4 production to 306,000 units will likely be led by faster capacity expansion in China, says Nathan, who expects 1.4 million deliveries in 2022.
Nathan now expects Tesla to deliver 1.75 million units in 2023 compared to 1.66 million units prior.
Price Action: TSLA shares traded lower by 1.18% at $1,135.99 in the premarket session on the last check Wednesday.