Tesla (TSLA) PT Raised to 'Street High' $2,322 at Piper Sandler; 'Runaway' Share Gains and Software Margins

(Updated - July 13, 2020 5:49 PM EDT)

After the close Monday, Piper Sandler analyst Alexander Potter raised the price target on Tesla (NASDAQ: TSLA) to 'Street High' $2,322 (from $939) while maintaining an Overweight rating.

• "runaway" share gains
• 90% margin software
• Potter said despite the +260% YTD surge in the stock it is NOT time to redeploy capital elsewhere.
• "In our view, Tesla is the most consequential company in the mobility ecosystem, and this is unlikely to change in the next decade," the analyst commented.
• The firm's updated delivery outlook calls for nearly 4M deliveries in 2025, implying overall market share of ~7% in China and 9.5% in the United States
• Software is the reason why mid-20s operating margin is possible, the analyst said. "While deliveries are a key driver of our increased near-term estimates, software is the biggest driver of our increased DCF-based price target (which is moving to $2,322, up from $939). Tesla has noted the possibility for 30%+ gross margins if/when more customers optin for purchasing the company's full self-driving (FSD) software, and with our updated model, we can now explicitly stress-test this claim."

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