Deutsche Bank Remains 'impressed' with Tesla (TSLA) Operational Execution, BUY and $400 PT
Deutsche Bank analyst Emmanuel Rosner reiterated a Buy rating and $400.00 price target on Tesla (NASDAQ: TSLA).
The analyst comments "Beyond the quarter, we remain impressed with Tesla’s operational execution in the face of large industry supply chain challenges and note that the company is working its way to ramp up volume in lower COGS regions. The Shanghai factory has recently completed a project to expand production capacity to 22,000 units of Model 3 and Model Y per week, while Berlin and Texas are expected to end the year at 5,000 units per week. Looking ahead to the full year, we are tweaking total delivery slightly to 1.39m units (+48% YoY), and revenue to $87.2bn. This is to account for potential push-out of December delivery into 2023 in order for some consumers to qualify for either the full or partial amount of the 7,500 EV credit under the latest IRA. Our automotive gross margin excl. credit is maintained at 28.5%, and EPS also stays at $4.50 (vs. consensus $4.36). As for 2023, our recent deep-dive suggests that Tesla has considerable underappreciated margin improvement potential next year by shifting production mix to COGS-favorable regions. Together with the IRA battery production credit potentials, we estimate Tesla can reduce its COGS per vehicle by more than ~$3,200 vs. 2021 level, not accounting for inflationary and other efficiency factors. We continue to view Tesla as one of most attractive stories in the autos sector thanks to its pricing power, superior cost structure, strong execution, and having secured supply and now establishing more meaningful capacity to support considerable growth. Reiterate Buy."
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Shares of Tesla closed at $268.21 yesterday.