Jefferies analyst Philippe Houchois reiterated a Buy rating and $1,250.00 price target on Tesla (NASDAQ: TSLA) after the company reported a drop in COGS per unit down despite increases in the cost of raw materials as well as logistics inflation. Margins expanded despite these headwinds with ASPs sequentially flattish.

The analyst stated "Q1 results beat all critical KPIs with gross auto margin (ex ZEV) reaching 30% for the first time and continuing to set new industry standards for complexity and productivity". He went on to comment "Guidance unchanged but feels more confident - 50+% multi-year growth in deliveries confirmed, potentially 60% this year, Q2 production flat to down vs Q1 (305k) with Q3/4 much higher and 1.5m units achievable. Equipment capacity, pace of new manufacturing technologies and supply chains remain the limiting factors in 2022."

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Shares of Tesla closed at $977.20 yesterday.