Canaccord Genuity Reiterates Buy Rating on Tesla (TSLA), 'Tesla is increasingly a bet on autonomy'
Canaccord Genuity analyst George Gianarikas reiterated a Buy rating and $234.00 price target on Tesla (NASDAQ: TSLA).
The analyst said: "We currently see Tesla and Mobileye as winners in the passenger AV market. Being vertically integrated is crucial to constructing a well functioning AV system. We think many independent OEM efforts will wind down over time for reasons including lack of scale, leaving room for Mobileye to gain traction as a merchant vendor to multiple OEMs. We see Tesla's system as well functioning and likely used exclusively for its own vehicle fleet for some time. We see Aurora as dominant in US autonomous trucking, which, in our opinion, is sufficient for the stock to reach our price target."
"As we wade through the noise and news of the last several weeks – which includes the 1-month free trial of FSD to all capable US Tesla vehicles – one thing is clear despite the intensity of the muddle. Tesla is increasingly a bet on autonomy. We do estimate that there will be a near-to-medium-term return to volume growth despite the naysayers and prognostications that this is a forever broken growth story. We also estimate margins should improve and that energy storage growth should continue. All these things should help earnings growth. But – for a true breakthrough in margins above historical levels, and for the story to significantly and sustainably outperform based on sizable upside earnings revisions- we need the razor/razorblade model to ignite; we need a trajectory change in FSD adoption either through product improvements and/or price cuts. FSD is getting better all the time at what appears to us, an accelerating pace – so maybe we are close. To add – the Robotaxi reveal on 8/8 sounds like it will likely pay homage to autonomy. TONS of questions remain, but it’s likely going to be an autonomy day. Take it or leave it, a bet on Tesla is a bet on an autonomous future. We’ll take it."
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Shares of Tesla closed at $164.90 yesterday.