Tesla stock
TESLA INC
-0.23%
closure:0
opening:300.01
High:303.57
low:295.6
cycle:—
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Received an increase in the target price and an expression of confidence from two analysts who are optimistic about the stock. Still, this positive news does not help the stock in what seems to be a difficult market today.
Deutsche Bank analyst Emanuel Rosner raised his price target for Tesla shares to $400 from $375 today. “We are raising our 2023 gross profit estimates for Tesla,” Rosner wrote in his report. Rosner sees costs falling and production rising at Tesla’s new plants in Germany and Texas.
In addition, Rosner sees Tesla’s gross profit rate reaching 30%. The German BMW, for example, is expected to generate a gross profit rate of about 18% in 2023. Therefore, he gives Tesla’s stock a buy recommendation. So does New Street Research analyst Pierre Prago, whose target price is $530. On Friday, Prago wrote a research report addressing a new concern among Tesla investors: a decrease in wait times for new Tesla cars, which could signal weakening demand.
However, Prago isn’t worried about demand. “Our analysis suggests that the recent sudden drop of 40% to 60% in wait times for new orders reflects only a normalization of the order backlog, after an acceleration in the backlog in the first half,” the analyst wrote. “Even as orders grow steadily, an irregular increase in production capacity means wait times will remain volatile.”
In one sense, both analysts are bullish for the same reason: increasing capacity. Tesla added two new factories in 2022, one near Berlin and the other in Austin, Texas. Tesla now has four assembly plants that can produce, perhaps, 2.5 million units within a few years. On the other hand, Wall Street estimates that the production capacity will be around 1.5 million units in 2022.
These are two bullish notes from two analysts predicting a bull market. But still, not everyone is optimistic about the company. While 55% of the analysts reviewing Tesla give its stock a buy recommendation, about 20% give a sell recommendation. The average analyst price target for Tesla stock is about $300, just as it is currently trading, and only time will tell if those who expect a bull market or those who expect a bear market are right about the stock from here.
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