Tesla (NASDAQ: TSLA) has been upgraded to outperform from neutral at Credit Suisse with a price target of $1,025. The firm said stock pullback creates an "attractive" entry point amid "highly favorable" fundamentals.
Credit Suisse upgraded Tesla to outperform from neutral, noting that with the recent market decline creates an "attractive" entry point for the stock. In the report, analysts Dan Levy and Trevor Young wrote that they believe the stock should bounce back given "highly favorable" fundamentals. The firm expects further volume growth, sustained strong margins, and a positive revision in earnings per share in the coming years.
"With robust fundamentals ahead and with the stock having been caught in the market decline, we believe the stock should recover."
"Tesla remains the leader of the multidecade secular transition to electric vehicles," said the report. "With less question around demand and much more question around supply of electric vehicles, Tesla should be a key beneficiary. It has a product lead vs. others and has taken the most holistic approach on electric vehicle supply," the analysts continue.
"Where we could be wrong:...Tesla's underperformance year to date, down 20% versus down 7% for the S&P 500, can be explained by a market that has punished growth.
"Year-to-date, value stocks have relatively outperformed by 12%, while growth stocks, for example, Tesla, have underperformed by 7%. As any positive outlook on Tesla must use a long-term valuation, a risk to our call is that rising rates pressure secular growers."
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About the Author
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.