Oppenheimer Raises Tesla TSLA Price Target to $1,036 on Manufacturing Advantages

Update: The price target was from Jan 2021

Oppenheimer raised Tesla (NASDAQ: TSLA) price target by $550, to $1,036 per share, as lower production costs, self-driving cars, and higher sales in China should continue to give the stock a tailwind.

Oppenheimer analyst Colin Rusch believes that cost-cutting and simplification in the group's manufacturing base, along with expanding manufacturing operations in Berlin and Austin, Texas, should support Tesla shares even after a 700% surge last year. Given the many positives and a tailwind for Tesla, Rusch raised his target price by $550 to $1,036 per share based on "85x 2025E EPS, discounted two years at 10%, in line with EV and artificial intelligence peers."
"Tesla's efforts simplifying manufacturing have seen significant success and will continue, especially with volumes scaling, and that mix should be a tailwind given a higher level of Model S/X and China-based sales."

He pointed out that investors will try to get the best possible understanding of the costs associated with Tesla's new production of battery cells. In addition, they will be looking for signs that Tesla's autonomous driving systems will improve vehicle safety and accelerate the deployment of FSD in the coming years.
“We believe investors are trying to decide where the stock will go...and we believe the bulls are betting on Tesla's leading commercialization of autonomous vehicle technology,” Rush said.

"Given production expected to start in Berlin and Austin this year, we are watching timelines and Capex numbers closely given potential complications from COVID-19 slowdown and unique process equipment, notably for larger molds and battery materials," he added. "We expect Tesla to ramp this equipment but would not be surprised by delays due to technological or logistical complexities."

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