Tesla has yet to hit the top line. It is extremely bullish and let’s see how there Q4 results will be… Tesla's stock (TSLA) has a clear shot to more fertile grounds, contends long-time bullish analyst Dan Ives at Wedbush. "Demand for China is the linchpin. As capacity builds in Berlin and Austin, that's what I think sends Tesla's stock to $1,400 as our base case. Our bull case is $1,800," Ives said on Yahoo Finance Live. Ives rates Tesla at Outperform, and is one of the most upbeat analysts on the Street on the EV maker.
Ives' hearty price target on Tesla's stock is a function of two factors. First, Ives estimates 40% of Tesla's deliveries in 2022 will be derived from the lucrative China market. And two, the supply chain issues (namely semiconductor shortages) that have plagued automakers this year will abate in 2022. In turn, Tesla stands to surprise the Street by delivering close to 1.5 million units by year-end. The return to a focus on Tesla's fundamentals would be welcome news for the automaker's bulls.
Tesla shares have come under pressure in December as CEO Elon Musk sells down his stake in the company to meet tax obligations. Musk has sold roughly 15.6 million shares for a shade over $16 billion, bringing him close to unloading 10% of his stake in the company as planned.
Despite the recent pressure on Tesla's stock, Ives isn't alone in staying rosy on the company ahead of 2022. "All in, with considerable volume, cost and operating leverage momentum, we continue to see large upside to 2022 consensus expectations, depending on execution of new factories ramp-up, and supply chain bottlenecks. Mid-term, we believe Tesla’s impressive trajectory for its battery technology, capacity and especially cost will continue to accelerate the world’s shift to electric vehicles and extend Tesla’s lead considerably. It should also enable Tesla to keep expanding its operating margins, likely exceeding 20% over the next few years, representing very best-in-class performance," says Deutsche Bank analyst Emmanuel Rosner.