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Tesla's (NASDAQ: TSLA) lead over other automakers in the EV race is only enhanced by headwinds, says Credit Suisse. While the manufacturer faces a tough quarter, the firm sees plenty of reason to be optimistic about its stock.
Credit Suisse's Dan Levy expects Tesla to announce Q2 deliveries of 242,000 vehicles, below the consensus estimate of around 273,000. Regardless, the bullish outlook for TSLA is “is amplified” given the company's strong positioning, he wrote. The analyst is confident that Tesla remains the world leader in electric vehicles, and with the deterioration of the global situation with the supply chain, its leadership will only increase.
“We believe the long-term case for Tesla is clear–Tesla remains the global leader in EVs, and amid rising supply chain risks, we believe Tesla's lead over other automakers in the race to EV is only amplified given its lead in vertical integration and its prior EV experience,” Levy wrote.
Although Levy cut Tesla's share price target to $1,000 from $1,125, he looked beyond this quarter alone and kept the outperform rating on the shares that he established back in January. Although Giga Shanghai is underperforming in Q2, the analyst expects a sharp rise in the second half of the year. Despite all the headwinds, which are short-term, the long-term positive outlook on Tesla is provided by fundamental indicators.
“[We]continue to believe in our thesis that robust fundamentals ahead should outweigh the near-term challenges for Tesla such as the recent growth selloff, production disruptions in China, lingering semiconductor failure and magnified inflationary pressures,” Levy wrote.
© 2022, Eva Fox | Tesmanian. All rights reserved.
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