Tesla (NASDAQ: TSLA) receives a $1,200 price target from Goldman Sachs, as the firm witnessed robust Q4 2021 deliveries, an indication that the manufacturer could significantly increase production in the coming years.
Goldman Sachs analyst Mark Delaney raised the price target on Tesla from $1,125 to $1,200 per share and encourages investors to "focus on stocks that are best positioned for key secular growth areas." He is confident that the Q4 2021 delivery data demonstrates the manufacturer's ability to continue to grow in 2022 and 2023, selling more vehicles.
Delaney notes that Tesla is the leader in the EV market, which is due to a number of key factors that significantly distinguish the company from all those on the market.
"We believe that Tesla, given its leadership position in EVs (including its vertical integration and tight of hardware and software, as well coupling as its ecosystem of charging stations and brand), and its focus on clean transportation more broadly (given its solar and storage businesses) will be best positioned to capitalize on the long-term shift to EVs."
Goldman Sachs expects Tesla to pick up profit margins over the medium term as it continues to ramp up production of the popular Model Y, as its new factories in Germany and Texas will begin operations shortly. In addition, software that continues to evolve will be profitable in the long run.
"We expect Tesla to expand margins in the intermediate term as it ramps the important Model Y product as well as new factories in Berlin, Germany and Austin, Texas, and in the long-term as it increases its mix of software revenue. We see upside to FactSet consensus estimates in the next few years."
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