Piper Sandler announced they have reiterated an Overweight rating on Tesla and predicted a $1200 price target for TSLA shares. This rating comes after another successful earnings release from the auto manufacturer in late July.
A Piper Sandler analyst, Alex Potter, cut Tesla’s revenue estimates in 2021 and 2022 due to lower deliveries. This lower near-term outlook reflects the current supply chain uncertainty with chips and parts and lower EV sales in China due to stiff competition in that market. Tesla is the number 2 EV brand and the only foreign contender in the market. While in Europe, Tesla also holds the second spot but may re-take first with Model Y sales.
Potter notes that there was nothing fishy about the beat in 2Q, and Tesla margins were, in fact, that high. In addition, Tesla expects to gain a further $1.3 billion in revenue with its self-driving software over the next year.
Finally, Potter notes that Tesla is still the top-selling EV sold in the United States. The company has 67% of the market, but he expects this to drop as more competitors switch to electric power. However, the declining EV market share of Tesla should not be considered a bearish signal moving forward as per Potter.