After spending a week in Berlin touring Tesla’s new Gigafactory, the Deutsche Bank analyst Emmanuel Rosner feels even more bullish on Tesla stock.
Here are the key details of Rosner’s new bullish note on the EV maker:
Target price: 375 dollars
It is supposed to be up: about 24%
Tesla stock moves at midday Monday: Down about 1% amid broader market pressure on high-beta stocks
“We hosted investors last week in Berlin for a guided tour of Tesla’s new Gigafactory, high-speed Autobahn test drives of the Model Y Performance, and a meeting with IR head Martin Vieja,” Rosner wrote. “We came away with the feeling that Tesla’s new localized vehicle production in Europe could be a game-changer, making Tesla an even more formidable competitor in the region, while likely increasing the company’s gross profits.” The plant already has the capacity to produce 500,000 Model Ys per year, but currently operates only 2 shifts; Tesla plans to ramp up to 4 shifts and full production sometime in 2023.”
From the Yahoo Finance Live Archive: Rosner spoke with Tesla on July 5
He added that the company recognized the production risk associated with a potential gas crisis in Germany amid the Ukrainian-Russian war, while asserting that the company has flexibility in terms of global car production.
“More broadly, Tesla commented that demand for its vehicles remains strong, outpacing its ability to supply,” Rosner added. “This is certainly the case in the US, and it may become even more acute after [Inflation Reduction Act] goes into effect in January 2023 … our view is that it could see solid IRA benefit and potentially qualify for 3 major sources of subsidies: EV buyer tax credits (up to $7,500 per vehicle), subsidies for US EV battery cell manufacturers ($35/kWh) and subsidies for US battery module and pack manufacturers ($10/kWh). Overall, we believe 2023 could be a pivotal year for Tesla and continue to view it as one of the most compelling stories in the automotive sector.”
Deutsche Bank estimates that Tesla is “on track for 1.4 million units for the full year, up 50%,” the note said. “And they’ve also done an incredible job of raising prices for some of the pressure on raw materials. And so we think margins can really look good going forward.”