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Tesla TSLA Has 30% Upside Potential, Says Wolfe Research, with $360 PT

Tesla TSLA Has 30% Upside Potential, Says Wolfe Research, with $360 PT

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A Wolfe Research analyst says Tesla shares have upside potential to $360 per share. He bases his bullish outlook on the Inflation Reduction Act (IRA) and its benefits for the manufacturer.

Tesla shares have already rebounded about 30% from their May low, but a Wolfe Research analyst says the rally is set to continue. The firm's analyst, Rod Lache, recommends Tesla stock as a buy as it has an upside potential of another 30%, to $360 per share.

First of all, his bullish outlook is based on the recently passed “Inflation Reduction Act.” The analyst believes that the IRA will be a blessing for the manufacturer's shares. The analyst wrote:

“Inflation Reduction Act has the potential to affect the entire value chain – significantly changing the trajectory of EV adoption, as well as the competitive landscape and earnings prospects for OEMs and Suppliers.”

Lache predicts that electric vehicles will penetrate 20% of the U.S. over the next three years. This is a significant revision of his views, as he was previously convinced that by 2025 penetration would be 10%.

The IRA is offering a $7,500 tax credit on all new U.S.-made electric vehicles through 2032. Lache expects Tesla and its customers to receive about $11 billion in incentives. The analyst added:

“We believe this development is far from fully appreciated. By 2025, the U.S. government may be directing incentives worth close to $11 billion to TSLA and their customers. We expect this to almost certainly influence OEM profitability.”

He predicts Tesla will increase its earnings to $16 per share by 2025, up from his earlier estimate of $12.70.

© 2022, Eva Fox | Tesmanian. All rights reserved.

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This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Eva Fox, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.

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.

About the Author

Eva Fox

Eva Fox

Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.

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