Tesla looks to extend rally as more analysts look past price cuts
Win McNamee/Getty Images News

Berenberg upgraded Tesla (NASDAQ:TSLA) to a Buy rating from Hold on Monday on its view the electric vehicle stock is still attractive despite the 44% year-to-date rally.
Analyst Adrian Yanoshik and team believe that the price cuts fired off by Tesla (TSLA) reflect the company's cost leadership strategy to nab market share.
The price cuts are anticipated to only be a blip as margins recover with product shifting away from the Fremont, California, plant, which is noted to have higher labor costs, old equipment and an inefficient design. Thatâs part of a multi-year opportunity Yanoshik sees for TSLA improving efficiency in capital and labor.
Yanoshik also highlighted battery cell production as another opportunity for Tesla even if the road to its final goals is bumpy.
Last week, Morgan Stanley reiterated Tesla as its Top Pick in the auto sector with a $220 target. Analyst Adam Jonas and team see FY23 as a potentially bump year year where auto price inflation turns to deflation compounded by continued macro and geopolitical uncertainty. "With Tesla, there's also the ever present background risk of 'company specific' idiosyncratic and sentiment-related factors that can also swing this historically volatile name in both directions," noted Jonas. However, the overarching view is that TSLA can leverage its cost leadership in electric vehicles to aggressively expand its user base and over time generate a higher percentage of revenue from recurring/high-margin software and services.
Shares of Tesla (TSLA) dipped 1.31% on Monday after jumping 11.00% on Monday.
The relative strength index on Tesla is back over 60 and the stock trades above its 50-day moving average once again.