🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

Jefferies raises price target on Tesla

Published 03/06/2023, 06:52 AM
Updated 03/06/2023, 06:59 AM
© Reuters.  Jefferies raises price target on Tesla (TSLA)
TSLA
-

By Michael Elkins

Jefferies reiterated a Buy rating on Tesla (NASDAQ:TSLA) and raised the price target on the stock to $230.00 (From: $180.00) following the electric vehicle maker’s 2023 investor day.

“After a harrowing H2, the Austin investor day demonstrated Tesla remains very much a "Day 1" company,” analysts wrote in a note. “Lack of new product unveil does not imply major growth delays in our view. Scaling up 3/Y further through dynamic pricing could limit the scope for earnings surprises in 2023/24 but benefit FCF and ROIC.”

According to Tesla’s investor presentation, the company aims to cut costs on NextGen platforms by up to 50%. A 50% reduction in unit NextGen COGS to c.$18k supports an ASP $25k+, gross margin 20% and EBIT margin in low to mid-teens. Analysts saw tangible progress on 4680 and dry electrode production, both critical to lower battery cell cost towards $70/Kwh and further roll-out of casting. Jefferies assumes NextGen SOP with streamlined "box process" assembly as early as H2 '24 given timeline of the company’s Mexican plant.

Jefferies raised 2023 EBIT margin estimates 10% to $15.3 billion, 14.7% margin and FCF $13.4B including WC reversal, with post-tax ROIC going from 40% to 60% by 2025. Analysts say that Q1 should be a trough with revenue of $23.1B, o/w autos $19.9B and $250M ZEV.

Shares of TSLA are down 1.09% in pre-market trading on Monday.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.