Tuesday, January 31, 2023
No Result
View All Result
  • Home
  • Recent
  • Business
  • Economy
  • Investing
  • Markets
  • Personal Finance
  • Retirement
  • Tech
  • Startups
  • Insurance
  • Market Research
  • Crypto
  • Home
  • Recent
  • Business
  • Economy
  • Investing
  • Markets
  • Personal Finance
  • Retirement
  • Tech
  • Startups
  • Insurance
  • Market Research
  • Crypto
No Result
View All Result
Home Investing

Tesla Is Riding Out the Volatility Quite Well, Says Analyst

Updates Finance by Updates Finance
July 22, 2022
in Investing
0
74
SHARES
1.2k
VIEWS
Share on FacebookShare on Twitter


You might also like

Dividend Aristocrats In Focus: Aflac

These 2 ‘Oversold’ Stocks Could Be Ready for a Comeback, Say Analysts

Commercial Real Estate Could Crash

Shares of Tesla (NASDAQ: TSLA) were up by 9.8% on Thursday to close at $815.12 following the electric vehicle (EV) maker’s better-than-expected Q2 results.

Mizuho Securities analyst Vijay Rakesh weighed in on these results. The analyst retained his bullish thesis on the stock with a Buy rating and raised the price target to $1,175 from $1,150. The top-rated analyst’s price target implies an upside potential of 44.5% at current levels.

Let us look at the reasons behind the analyst’s optimistic outlook on the stock.

Tesla’s Q2 Results

Tesla’s revenues soared 42% year-over-year to $16.93 billion, but it slightly missed the consensus estimate of $17.1 billion. Adjusted earnings came in at $2.27 per share, up 56.6% year-over-year and exceeding the consensus estimate of $1.81.

Analyst Rakesh was particularly upbeat about Tesla’s automotive gross margin of 27.9%, which was up 40 basis points year-over-year but declined 380 basis points quarter-on-quarter. Rakesh pointed out that this gross margin was above consensus estimates despite shutdowns in Shanghai and higher costs, “comfortably above GMs [gross margins] for legacy/ICE [internal combustion engine] Auto OEMs [Original Equipment Manufacturers] at 10-25%.”

The company’s management stated on its Q2 earnings call, “…we are working through the ramp inefficiencies of our new factories, which are progressing well but have had an impact on margin as those factories come online.”

Tesla’s management also added, “While we continue to see a benefit from higher pricing flowing through, which experienced some foreign exchange-related headwinds, our cost structure continues to experience cost increases from inflation, commodities and logistics.”

However, when it comes to vehicle deliveries over the next few years, the company continues to target a compounded annual growth rate (CAGR) of 50%.

Tesla’s Production Capacity Is Ramping Up

In Q2, TSLA produced 258,580 cars, which increased 25% year-over-year. It delivered 254,695 cars, up 27% year-over-year.

By the top-rated analyst’s estimate, the company’s installed annual production capacity is currently at more than 1.9 million vehicles, with production likely to reach approximately 40,000 per week by the end of this year. Rakesh anticipates that production at Tesla’s factories could grow by 20% year-over-year and potentially reach 50,000 per week by the end of 2023.

Rakesh is of the opinion that “its Shanghai Gigafactory capacity is mostly recovered, with 1) Gigafactories Berlin at ~1000/wk now and Texas expected to ramp to ~1000/wk in next few months.”

The analyst also noted that Tesla had raised the prices of its popular car models, Model 3 and Model Y, by 15% to 20% year-over-year, “we believe due to rising input costs and could benefit 3Q22/ SepQ with backlogs.”

Wall Street’s Take on TSLA

Rakesh concluded, “Longer-term, we believe TSLA GMs [gross margins] could benefit from economies of scale, manufacturing efficiencies, and technology advancements such as 4680 [Tesla’s new battery].”

The analyst added that over the medium-term, “investor concerns revolve less around TSLA’s strong production ramp, profitability, or execution and more on the health of the consumer amid concerns of a broader global slowdown into 4Q22.”

Wall Street analysts are cautiously optimistic about Tesla, with a Moderate Buy consensus rating based on 17 Buys, five Holds, and seven Sells. The average Tesla price target of $886.04 implies an upside potential of 8.7% at current levels.

Bottom Line

While Tesla seems to be riding through the current challenging macro environment well, it remains to be seen how it measures up if the current economic slowdown continues.

Investor sentiment is also very positive about the stock, according to the TipRanks Crowd Wisdom tool. This tool indicates that 18.7% of the best-performing portfolios on TipRanks have upped their holding of the stock in the past 30 days.

Disclosure



Source link

Tags: AnalystRidingTeslavolatility
Share30Tweet19
Updates Finance

Updates Finance

Recommended For You

Dividend Aristocrats In Focus: Aflac

by Updates Finance
January 31, 2023
0

Updated on January 30th, 2023 by Felix Martinez Insurance can be a great business. Insurers collect revenue from policy premiums and make money by investing the accumulated premiums...

Read more

These 2 ‘Oversold’ Stocks Could Be Ready for a Comeback, Say Analysts

by Updates Finance
January 31, 2023
0

Read more

Commercial Real Estate Could Crash

by Updates Finance
January 31, 2023
0

A commercial real estate crash is looking more and more likely in 2023. Rising interest rates, compressed cap rates, and new inventory about to hit the market is...

Read more

Bitcoin Mining and Local Stock Market Performance Correlations

by Updates Finance
January 31, 2023
0

Crypto is an uncorrelated asset class, according to its proponents, and as such ought to contribute to portfolio diversification. However, research has shown that this claim hasn’t held...

Read more

Why Investing In Strong Leaders Makes You More Money

by Updates Finance
January 30, 2023
0

This week in The Banyan Edge Podcast, we separate winners from losers.That is, finding winning businesses with strong leaders and even stronger books…And weeding out the losing ones, which...

Read more
Next Post

Considering a website redesign? Why not do it in public?

Related News

Air Canada – Its Moment Has Come

January 30, 2023

No Savings at 30? The Lazy Way to Jumpstart Your Retirement

October 27, 2022

Is Zuckerberg out? : stocks

October 28, 2022

Browse by Category

  • Business
  • Cryptocurrency
  • Economy
  • Insurance
  • Investing
  • Latest updates
  • Market Research
  • Markets
  • Personal Finance
  • Retirement
  • Startups
  • Technology

Get the latest Financial news on updatesfinance.com. Business news, Economy news, Investing news, Personal Finance and more.

CATEGORIES

  • Business
  • Cryptocurrency
  • Economy
  • Insurance
  • Investing
  • Latest updates
  • Market Research
  • Markets
  • Personal Finance
  • Retirement
  • Startups
  • Technology

Recent News

  • OpenAI releases tool to detect AI-generated text, including from ChatGPT • TechCrunch
  • Fortunately, this isn’t the Volcker disinflation

Copyright © 2022 - Updates Finance..

No Result
View All Result
  • Home
  • DMCA
  • Disclaimer
  • Cookie Privacy Policy
  • Privacy Policy
  • Terms and Conditions
  • Contact us

Copyright © 2022 - Updates Finance..

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?