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TSLA Stock Jumps 10%, Credit Suisse Upgrades Tesla to Outperform with $1,025 Price Target

UTC by Steve Muchoki · 3 min read
TSLA Stock Jumps 10%, Credit Suisse Upgrades Tesla to Outperform with $1,025 Price Target
Photo: Depositphotos

Tesla is going to ramp up production in all its sites including Texas, California, China, and Berlin, and achieve 50% average annual growth in vehicle deliveries.

Tesla Inc (NASDAQ: TSLA) stock closed Monday, and January, trading at $936.72, up 10.68% from the day’s opening price. The gains extended during the after-hours trading session with approximately 0.14% tops. After reporting better than expected fourth-quarter earnings results on Wednesday, analysts are optimistic the electric vehicle giant company will deliver much better in the coming quarters. According to StreetInsider, Credit Suisse analyst Dan Levy upgraded Tesla stock to Outperform and gave a price target of $1,025.

Credit Suisse Analyst on Tesla Stock

The analyst noted that Tesla is bound to experience further volume growth, sustained margin strength, and positive EPS revisions in 2022. He further noted that the company’s 2022 profits are 25% ahead of most analysts’ expectations.

“Tesla has surprised to the upside on margins, in large part driven by cost reductions; we believe the strong margins are sustainable,” Levy said. “We believe legacy OEMs are taking clear steps to transitioning to an EV world, yet we expect Tesla to maintain a lead for the foreseeable future.”

Besides the investment bank’s positive ratings, the company also received a positive endorsement by Barron’s magazine. Notably, the magazine called TSLA stock a better buy than either General Motors (NYSE: GM) or Ford (NYSE: F).

Tesla Stock and the Market Outlook

During the earnings call, the company noted that it does not expect to release any new model this year but focuses on scaling production of current models in the market. Furthermore, the demand for electric vehicles is rising by the day as more countries move towards EVs and away from combustion engines.

Additionally, the company noted that it is working on its autonomous systems to scale its FSD operations. As Tesla CEO Elon Musk recently noted through a tweet, the Full Self-Drive feature is the future.

“Up until now, Tesla margins have largely been a function of auto hardware sales, with some modest benefits of software…specifically FSD (Full Self-Drive features). However, as Tesla releases more FSD features and unlocks more deferred revenue (which likely flows through at 100% contribution margin), Tesla should see incremental margin benefit.”

Tesla expects to ramp up production in all its sites including Texas, California, China, and Berlin, and achieve 50% average annual growth in vehicle deliveries.

TSLA shares are down approximately 11.36%, 22.49%,  and 21.93% YTD, the last three months and one month respectively through Monday according to market data provided by MarketWatch. However, TSLA shares are up approximately 11.54% in the past year. The company has a market capitalization of approximately $849.96 billion with 1 billion in shares outstanding.

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Steve Muchoki

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