Written by Cláudio Afonso | info@claudio-afonso.com | LinkedIn | Twitter
Tesla shares are trading at $817.68 per share, soaring 10.13% as of 2:10 p.m. Eastern time, after receiving several increases in analyst price targets. Since the reporting of the — stronger than expected — second quarter earnings results, Tesla‘s price target was raised by BofA Securities, Mizuho Securities, Oppenheimer, Wells Fargo, Cowen, and Canaccord. Goldman Sachs, Wedbush and Morgan Stanley reiterated the previous ones.
The automaker announced Wednesday its Q2 2022 Earnings Results reporting total revenue of $16.9 billion (up 42% year-over-year) and a 14.6% operating margin. Tesla also announced that sold 75% of its Bitcoin holdings for a total of $936 million. During the conference call, Elon Musk said the company is open to adding Bitcoin again and said Tesla didn’t sell any Dogecoin (the company started accepting Dogecoin as payment for its merchandise earlier this year).
Starting with Mizuho Securities, the analyst Vijay Rakesh raised the firm’s price target on Tesla stock to $1,175 (from $1,150) saying they continue to see “solid production ramp, profitability and execution” while enhancing the fact that Tesla reiterated its 50% CAGR rate in vehicles deliveries.
“We continue to see solid production ramp, profitability and execution, EVs growing at a ~30%+ 10Y CAGR and with TSLA reiterating its long-term ~50% delivery CAGR target. We believe in the medium-term, investor concerns revolve around a potential consumer slowdown into 4Q22 (though CEO Elon Musk noted not seeing a slowdown yet, with Model Y-LR lead times extending into C23E),” Rakesh said in a note.
Oppenheimer senior research analyst Colin Rusch has also raised the price target slightly to $1,293 (from $1,291) saying, “We believe Tesla has the potential to be a transformational technology company and deliver outsized returns”.
“We are encouraged by (FSD) pricing commentary & teaser for AI Day 2. As a standalone, we believe FSD software revenue can lift GMs by 150-200bps+, with significant upside from robotaxi,” Rusch added.
Cowen analyst Jeffrey Osborne raised the firm’s price target on Tesla to $733 from $700 while keeping a Market Perform rating on the shares. Osborne said they showed upside to 2Q in EPS; however auto gross margins were largely in line and the upside stemmed from lower quality items such as its bitcoin sale which led to lower impairment, lower opex, and a lower tax rate. He sees the shares range bound until evidence plays out that Texas and Berlin factories are ramping well, as The Fly initially reported.
Canaccord analyst George Gianarikas raised the firm’s price target to $815 from $801 and keeps a Buy rating on the shares. The analyst said barring a significant slowdown in order momentum due to recession, he sees Tesla reaching escape velocity as the combination of improving China, Austin, Berlin and Fremont capacity should lead to a doubling of weekly production volumes from 2Q22 levels to 40K/week by the end of 2022. With the trifecta of offerings in solar, energy storage and EVs, Tesla remains the sustainability behemoth with sustainable free cash flow generation, as The Fly initially reported.
Wells Fargo analyst Colin M. Langan raised the price target on the company to $830.00 (from $820.00) while maintaining a Equal Weight rating.
Price Targets Reiterated
Morgan Stanley analyst Adam Jonas issued a new note saying the results were “stronger than expected for revenues and margin” adding that China’s re-opening momentum and Austin/Berlin ram execution will have a key role in the upcoming months. The analyst reiterated the firm’s price target of $1,150.
Goldman Sachs analyst Mark Delaney said Q2 results “met investors’ expectations,” which is enough for him to reiterate a Buy rating and a $1,000 per share price target.
“We believe that the combination of improving production volumes (on new factory ramps and easing semi constraints) and solid pricing will help auto deliveries and non-GAAP auto gross margins to trend higher in the coming quarters,” Delaney wrote in a research note.
Wedbush analysts Dan Inves and John Katsingris maintained a Buy rating and a $1,000 price target on the shares saying commenting, “In a nutshell, the quarter was better than feared with healthy guidance for 2H by Musk & Co. that look achievable with no margin for error”.
Tesla shares closed at $815.12 — up 9.78% on the day — reaching a new 3-month high, although the stock is down 22.87% year-to-date.
On Wednesday, the automaker said it expects to achieve ” 50% average annual growth in vehicle deliveries” confirming the previous guidance. Tesla also detailed the production in each factory adding that it achieved “record production rates across the company”. However, the company warned of “continuation of manufacturing challenges related to shutdowns, global supply chain disruptions, labor shortages and logistics and other complications, which limited our ability to consistently run our factories at full capacity”.
“Thanks to strong production rate improvement towards the end of Q2, our team in Germany produced more than 1,000 Model Y vehicles in a single week, using 2170 cells. We expect the production rate to continue improving through the rest of the year”, Tesla concluded.
Written by Cláudio Afonso | info@claudio-afonso.com | LinkedIn | Twitter