Piper Sandler has raised its Tesla price target to the highest of Wall Street. Its analyst has adjusted the TSLA price target to $1,300 from $1,200.

Piper Sandler analyst Alex Potter has released an update on Tesla shares, raising the company's price target to the highest level on Wall Street. Piper Sandler reiterated its Overweight rating and raised its price target from $1,200 to $1,300 on the stock after the manufacturer reported a strong Q3.

"We are reiterating our Overweight rating and boosting our price target from $1,200 to $1,300, following Tesla's breakout Q3 results."

Potter draws attention to three main findings that the firm thinks are overlooked. "Rather than re-hashing the quarter, or "piling on" to the bullishness following a big order from Hertz, we prefer to focus on three other insights that we think are getting overlooked," he wrote in the note.

"Tesla Killer" EV launches from other brands have generally fallen flat.
The analyst emphasizes that while many new electric vehicles have been on the market for several months now, none of them has been able to match the performance that Tesla has achieved.

Tesla's recent warranty performance has been strikingly good.
Potter explains that Tesla’s improving warranty performance is attributable to higher vehicle quality.

Deferred revenue could help offset margin weakness.
Deferred Full-Self Driving (FSD) revenue recognition could ease temporary margin reduction as Giga Texas and Giga Berlin ramp over the next few quarters.

Piper Sandler now expects Tesla's sales to peak at around 11.5 million units in 2030. This would mean that the company is likely to come out on top in terms of global market share. In addition, the firm has also increased its gross margin expectation.

“We now expect Tesla's sales volume to max out around 11.5M units in 2030, which likely implies a #1 ranking in terms of worldwide market share. We also nudged our gross margin expectation higher, citing recent strength. We note that several potential upside levers are still excluded from our forecast, including revenue related to insurance, HVAC, ‘AI-as-a-service,’ and software in the Energy segment.”

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