Nothing can go up parabolically without eventually coming back down for a breather, even Tesla, Inc. (TSLA). After a triumphant 2020, the electric vehicle (EV) manufacturer’s stock has gone through a period of consolidation since the beginning of 2021.
However, the tides could be turning once again for this clean energy and auto company with a massively loyal customer base and strong brand awareness. Tesla is expected to release earnings results after market hours on Monday, July 26.
Delineating his hypothesis on the matter is Daniel Ives of Wedbush Securities, who wrote that the stock has consolidated over the last six months partly due to more competitive entries into the EV market, headwinds from Chinese regulators, and of course, the semiconductor chip shortage affecting supply chains across much of the technological world.
Ives reiterated a Buy rating on the stock, with a price target of $1,000. This target suggests a possible 12-month upside of 52.6%.
The five-star analyst based his bullish opinion on the possible accelerations in Chinese deliveries in the back half of 2021 and 2022, which could eventually represent about 40% of Tesla’s total sales. Ives added that Tesla hit an “impressive” mark of over 200,000 deliveries over the past quarter. (See Tesla stock chart on TipRanks)
Other concerns to look out for include “the Bitcoin potential impairment charge, EV tax credit ebbs and flows, factory capacity buildout and timing of Berlin and Austin, Model Y sales, and any update on much anticipated battery technology improvements into 2022,” noted Ives.
Tesla is currently the clear market leader in EVs, and has more products nearing the end of the pipeline, such as its highly anticipated Cybertruck.
In his projections, Ives calculated that EVs currently represent about 3% of the global auto industry. He expects the number to increase to 10% by 2025, and the market to be worth about $5 trillion by 2031. According to Ives, Tesla is poised to play a major role in that space.
On TipRanks, TSLA has an analyst rating consensus of Hold, based on 10 Buy, 6 Hold, and 7 Sell ratings. The average Tesla price target is $658.27, which implies that shares are almost fully valued at current levels.
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.