Tesla bulls recharge as production outlook for back half brightens
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Tesla (NASDAQ:TSLA) bulls are out in force after the electric vehicle maker posted its Q2 deliveries report over the holiday weekend.
Oppenheimer (Outperform, $1,291 price target) said it remains bullish on Tesla (TSLA) as it factored in earnings leverage, the company's tech leadership position, and the recent share price slide.
Analyst Colin Rusch: "With TSLA 2Q22 deliveries/production largely in line with adjusted Street expectations after CEO Elon Musk publicly discussed supply chain and ramp headwinds as a strain on cash flow, we expect investors to focus on production run rate and pricing dynamics short term as key drivers of Revenue and GM under normalized operating conditions."
Rusch and team expect many of the current EV headwinds to be largely resolved by Q4, but would not be surprised by some margin pressure in the near term. Looking ahead, Oppenheimer is looking for attach rates on FSD for new buyers along with expected cadence of new feature set rollouts as autonomy competition begins to heat up through the end of 2022 into 2023.
Wedbush Securities (Outperform rating, $1,000 price target) also thinks the market will focus on the trajectory ahead for Tesla (TSLA) following the deliveries slowdown in Q2.
"While the softer macro will clearly impact demand around the edges the coming quarters, we believe Tesla has ample demand capacity to hit ~2 million units in 2023 globally with production capacity that can exceed this number when factoring in Austin and Berlin to a normalized China production target," noted analyst Dan Ives.
Goldman Sachs (Buy rating, $1,000 price target) thinks the record production that Tesla (TSLA) showed in June is a sign that Shanghai is ramping back up and more progress is being seen in Austin and Berlin.
Deutsche Bank (Buy rating, $1,125 price target) also expects a sharp recovery for Tesla (TSLA) in the back half of the year.
"Overall, we believe the companyâs strong and accelerating growth profile â through new factory ramps, its widening technology (battery cells and [full self-driving]) and cost leadership â should support the above-average valuation," updated analyst Emmanuel Rosner.
Shares of Tesla (TSLA) fell 1.64% premarket to $670.30, which was a bigger drop than the broad market.
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