Tesla (NASDAQ:TSLA) has finally received a bullish prediction from Wall Street. Mizuho Securities analyst Vijay Rakesh has reiterated a “buy” rating for the electric vehicle (EV) innovator, citing the company’s continuous success in execution and production. Despite turbulent market conditions, Rakesh has issued a price target for TSLA stock of $1,300. This is one of highest set by Wall Street in recent months.
What’s Happening With TSLA Stock
TSLA stock began the day by falling but a rebound is in sight. Shares fell 3% within the first hour of trading but have since seen a slight uptick. As of this writing, TSLA is down 0.74% for the day and look poised to keep moving upward.
This poor start to the trading week is likely due to negative market forces working against Tesla. Other EV producers such as Lucid (NASDAQ:LCID) and Rivian (NASDAQ:RIVN) also plunged as market opened, but unlike TSLA stock, have not seen a rebound. While Rakesh’s bullish take on Tesla hasn’t pushed the stock up yet, it is still worth noting for investors, as it highlights the company’s potential for growth.
Let’s take a closer look at why he thinks Tesla is still a winner.
Why It Matters
It’s no secret that Tesla has been losing its status as a favorite on Wall Street lately. Multiple analysts have reduced their TSLA stock price targets, including notorious Tesla bull Dan Ives of Wedbush. These bearish price predictions, combined with general macroeconomic headwinds, have helped push TSLA stock down recently.
Rakesh’s bullish prediction may usher in the turning point that Tesla needs to pull back into its sector’s lead. In a recent interview with CNBC, the analyst accounted for the company’s production problems spurred by the Shanghai lockdowns. As he sees it, though, Tesla has done a good job executing despite difficult market conditions which should reassure investors of its growth potential.
When asked, Rakesh noted that his high TSLA stock price target is based off the company’s 32% market share. In a note to clients, he laid out his team’s reasoning in more detail.
“We believe TSLA has potentially ~1.4M of its 1.5M C22E target units that could be produced at just Fremont and primarily Shanghai as the major hub,” the analyst noted.
While he acknowledged that Tesla’s road to ramping up production in Shanghai will likely pose constraints in the upcoming quarter, he doesn’t see it as a reason to bet against the stock. As he added:
We believe monthly April deliveries were ~40k, down ~22% from Jan’s ~51k, therefore the JunQ top line could be down q/q. That said, we believe a potentially stronger SepQ/DecQ rebound is possible with improved supply chains and Berlin ramping.
What It Means
While TSLA stock’s performance last week drew criticism, Rakesh’s bullish case should remind investors why that might have been premature. The company has indeed executed well and stayed primarily on top as market forces have continuously worked against it. Even with the setbacks that have ensued from the Shanghai shutdowns, powerful indicators suggest that TSLA stock will make up the ground it has lost. It closed out last week in the green and it is working hard to rally today, suggesting that Rakesh’s prediction is astute.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
