Amongst Wall Street’s big hitters, Tesla (TSLA) is a guaranteed headline grabber. Avid Street watchers will be keen to find out how the EV pioneer fared in Q1 when the company reports earnings today after the bell.
Wedbush analyst Daniel Ives is expecting “good news with upside likely across the board.”
The robust 1Q delivery numbers and “tight expense controls” implemented at Fremont suggest the Street’s total revenue forecast of $10.4 billion and pro forma EPS of $0.75 “appear very beatable.”
As is par for the course with Tesla, recent times have provided their fair share of high-profile incidents. These have included Chinese government PR issues, chip shortages and the recent Texas crash which has shone the spotlight on Tesla’s auto pilot safety record. The company has “navigated” though these mishaps, and Ives thinks the Street is now “laser focused on gauging the annual delivery trajectory for 2021.”
Going by the Q1 delivery numbers, the 5-star analyst thinks Tesla could deliver over 850,000 vehicles this year, with 900,000 a “stretch goal.” For comparison, in 2020, Tesla delivered a total of 499,550 vehicles.
The “Biden driven green tidal wave” is another tailwind over the coming months. Ives expects the EV tax credit ceiling will be raised from $7,500 to $10,000, positioning the U.S. on the verge of a “further inflection in demand.”
What’s more, the recent strong delivery numbers from Chinese rivals Nio and XPeng highlight the growing global demand for EVs. The analyst thinks that over the next decade, EV’s TAM (total addressable market) could reach $5 trillion, with Tesla spearheading the advance.
“With 3% of auto sales EV today globally and on a trajectory to be 10% by 2025, we believe the EV market is just starting to play out as the auto sector is transformed green over the coming years with Tesla leading the charge and other stalwarts such as GM and Ford now jumping into the deep end of the EV pool,” Ives summed up.
So, great news for Tesla and the EV sector, but what does it mean for investors? Ives rates Tesla shares an Outperform (i.e. Buy) rating along with a $1,000 price target. The figure suggests upside of 35% over the next 12 months. (To watch Ives’ track record, click here)
Ives belongs squarely in the Tesla bull cap, but not all are as convinced. The analyst consensus rates TSLA stock a Hold, based on a fairly even 11 Buys and 8 Holds and Sells, each. The forecast is for shares to trend south by 7% over the coming months, considering the average price target currently stands at $682.13. (See TSLA stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.