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Tesla will easily achieve more than 50% delivery growth in 2023, says Piper Sandler. Despite lower vehicle prices, the firm believes the margin profile of new capacity in Shanghai, Austin, and Berlin is higher than many expect.

Analysts at Piper Sandler cut Tesla's share price target by 12% to $300 from $340, but maintained an “Overweight” rating on shares, noting “investors should be proactively buying TSLA.” The firm has adjusted the price based on new market conditions, but remains confident in Tesla. In their note, analysts were positive about Tesla's recently announced price cuts, as were many other investment firms covering Tesla. Piper Sandler stated that “we don't think most investors appreciate the extent to which lower pricing could support Tesla's market share.”

A general decline in car prices will have a negative impact on margins, the firm admits, however lower prices support the company's overall growth trajectory. Piper Sandler is confident that “Tesla can easily achieve 50%+ delivery growth in 2023.” In addition, analysts noted that margins could be higher as “we suspect that the margin profile of new capacity in Shanghai, Austin, and Berlin is higher than many expect,” they wrote.

Piper Sandler once again highlighted the great potential of Tesla's Full Self-Driving (FSD) software, which they see as “a 'free' call option” at this valuation.

The firm concluded that “now that pricing adjustments have been made, and now that the valuation has reset, we think investors should be proactively buying TSLA.”

On Wednesday, TSLA closed at $128.78, up nearly 20% year-to-date.

© 2023, Eva Fox | Tesmanian. All rights reserved.

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Eva Fox holds zero shares of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.