After taking a break from its big year-to-date rally, Tesla (NASDAQ:TSLA) shares have resumed their upward trajectory and there is an upcoming catalyst that could sustain the uptick. On Wednesday (March 1), the EV leader will hold an investor day at the Gigafactory Texas.
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There could be plenty of fireworks on offer that could “help the stock keep rerating higher,” says Deutsche Bank analyst Emmanuel Rosner. “We expect the company to introduce Master Plan 3 and present the main drivers of its longer-term growth strategy, and in particular its 3rd generation vehicle platform which could support multiple future vehicles and segments at a lower price point,” the analyst further said.
Rosner also expects there will be updates on the FSD software V11, hardware HW4 and the latest on the production of the Cybertruck/Semi. A refresh of the Model 3 (project Highland), and a “ramp-up” of the energy storage segment should also be announced. Additionally, the analyst anticipates Tesla will discuss the role of in-house battery production technologies, capacity expansion, and steps to source raw materials to achieve its volume and cost targets.
Rosner also highlights a few possible announcements that could have a big impact on the stock. With Tesla intent on lowering the costs needed to manufacture its vehicles – the next-gen platform is potentially aiming at $20,000 in COGS (costs of goods sold) per vehicle – the company could provide details on the “lower cost trajectory” and how it intends to achieve the expected scale and cost.
Timelines regarding the “specific vehicles and segment launches” based on the next-gen platform could also further drive the bull case, while similarly, the rollout plans for FSD V11 and Hardware 4 that will “support and boost the autonomous capabilities of the next-gen platform and potentially support robotaxis” could be announced.
A further boost could also come from info regarding share buybacks. In October, Elon Musk stated that Tesla could undertake a share buyback program ranging from $5 billion to $10 billion. The board has discussed the possibility, but has not yet approved it.
“If Tesla can demonstrate a credible path towards much lower cost of next platform,” Rosner summed up, “this would reinforce considerably its competitive advantage, deepen the moat around its product, and likely clear a path towards multi-million unit deliveries before the end of the decade.”
With these potential catalysts to look forward to, Rosner has raised the price target from $220 to $250, suggesting the shares will climb 20% higher in the months ahead. Rosner’s rating stays a Buy. (To watch Rosner’s track record, click here)
So, that’s Deutsche Bank’s take, what does the rest of the Street think lies in Tesla store? Based on 22 Buys, 6 Holds and 3 Sells, the stock has a Moderate Buy consensus rating. However, at $204.96, the average target implies shares will stay rangebound for the foreseeable future. (See Tesla stock forecast)
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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.
