Credit Suisse Says Tesla (TSLA) Stock Offers an Attractive Entry Point, Sees Nearly 60% Upside From Here

May 27, 2022 9:03 AM EDT
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Price: $673.42 -1.76%

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Credit Suisse analyst Dan Levy has reiterated an Outperform rating on Tesla (NASDAQ: TSLA) following the recent pullback in shares.

The analyst’s $1,125.00 per share price target implies a nearly 60% upside from current levels.

His comments come after he visited TSLA’s Fremont facility with investors where he held discussions with the IR team.

“During our visit, we discussed how 2Q has played out to date in China. Mgmt noted that Shanghai saw a full month of shutdowns, the majority coming in April. Since the 1Q call, Shanghai has operated with one shift, and mgmt notes that for Tesla to produce at two shifts with meaningful volume, Tesla’s China suppliers will also need to resume production,” Levy said in a client note.

The analyst now sees 2Q22 deliveries tracking towards ~240-250k units, lower than the previous estimate of 295k units.

Still, Levy is convinced that the long-term opportunity for Tesla remains intact despite recent headwinds from China.

“While the manufacturing focus ahead for Tesla is on its new gigafactories (Shanghai, Berlin, Austin), the visit reminded us that Fremont has shown ongoing manufacturing kaizen. As for the stock, we anticipate the near-term (specifically 2Q) to reflect some regression in terms of margins and total deliveries, led by the challenges to production at Shanghai,” the analyst concluded.

Tesla stock price is up 2.7% heading into the New York open.

By Senad Karaahmetovic

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