The EV pioneer crushed Wall Street’s estimates, and Ives is in no doubt as to their importance.
“In our opinion the 1Q delivery numbers released on Friday was a paradigm changer and shows that the pent-up demand globally for Tesla’s Model 3/Y is hitting its next stage of growth as part of a global green tidal wave underway,” the 5-star analyst said.
Once more, Tesla “defied the skeptics and bears,” delivering 184,800 vehicles in Q1, compared to the Street’s 172,230 forecast. Sales of Model 3/Y hit a “jaw dropping” 182,780, well ahead of the consensus estimate for 160,230 deliveries. Chip shortages were behind the miss on the Model S/X, which came in at 2,020 vs the consensus estimate of 12,060 deliveries, although Ives notes the miss was “well telegraphed to the Street.”
Despite the chip shortage and different supply chain issues affecting the auto sector, Ives thinks Tesla can deliver more than 850,000 vehicles in 2021, with 900k “a stretch goal.”
Over the next 3 to 4 years, the analyst thinks Tesla’s profitability/FCF profile will “significantly improve,” and believes $20 of annual EPS could be achieved by 2026.
As part of the Biden Infrastructure Plan, Ives also anticipates the U.S. EV tax credit ceiling to be removed, which should be an additional boon for Tesla and the EV industry, as a whole.
“While the EV sector and Tesla shares have been under significant pressure so far this year,” Ives summed up, “We believe the tide is turning on the Street and the ‘eye popping’ delivery numbers coming out of China cannot be ignored with the trajectory on pace to represent ~40% of deliveries for Musk & Co. by 2022.”
The outperformance, according to Ives, merits a significant rejig to his Tesla model; the analyst upgrades TSLA from Neutral (i.e. Hold) to Outperform (i.e. Buy) while increasing the price target from $950 to $1000. Investors are looking at upside of ~45% from current levels. (To watch Ives’ track record, click here)
So, that’s the Wedbush view, what does the rest of the Street have in mind for Tesla? Not everyone is quite as bullish; going by the $681.1 average price target, the analysts think shares are currently fairly valued. Rating wise, opinions are split; the stock has a Hold consensus rating, based on an even 10 Buys and Holds, each, and an additional 7 Sells. (See Tesla stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.