Piper Sandler analyst lowers Tesla’s price target to $1,260 from $1,350, keeps an Overweight rating

Written by Cláudio Afonso | info@claudio-afonso.com

Piper Sandler analyst Alexander Potter lowered on Monday April 18 its price target on Tesla shares to $1,260 from $1,350 while keeping an Overweight rating. The analyst expects that China lockdowns “may continue impacting production in the second half of 2022” resulting in a cut of the guidance numbers to 1.54M from 1.58 million vehicles.

“The Shanghai plant built ~2k units/day in Q4+Q1; the stoppage likely caused 35k+ units of lost production. To reflect this, we are cutting our 2022 delivery estimate to 1.54M units, down from 1.58M units previously. This revision is also pushing our EPS forecast lower, but we’re still comfortably ahead of consensus. China lockdowns may continue impacting production in 2H22; we would buy any resulting weakness. Our price target is now $1,260 (down from $1,350), mainly due to a higher WACC (12% up from 11.5%). As with APTV and RIVN, our upward WACC adjustment is due to higher treasury yields.” — the analyst said.

When it comes to the risks for the stock performance, Potter names enhances: “delays, product defects/recalls, slow EV adoption, policy changes, supply disruption, and volatile CEO”.

Elon Musk was interviewed on Thursday by Chris Anderson during TED Talks in Vancouver, Canada. On the day that Musk confirmed its intention to buy Twitter and turn it private (keeping the largest number of shareholders it is possible by law), Tesla’s CEO talked about Tesla, SEC, and Twitter.

Written by Cláudio Afonso | info@claudio-afonso.com