According to Daniel Ives, a Wedbush analyst, shares in Tesla have an almost 30% upside over the next 12 months.
Tesla’s strong position comes as the company has robust demand for its product in China and hopes to open new factories in the US and Germany.
As well, Tesla is in a great situation as the demand for their vehicles currently outstrips supply
Ives expects component shortages to ease over the next year, which in turn would allow Tesla to meet growing demand in China, reports Bloomberg.
In addition, the company will bring factories in Austin and Berlin online, which should alleviate global production bottlenecks.
Ives estimates that by the end of 2022, Tesla will have the capacity to produce about 2 million cars annually. This production cap would double the current 1 million production capacity.
Ives notes that the linchpin to the overall bull thesis on Tesla remains China. He also reiterated his outperform rating and $1,400 price target for the stock.
2021 was a big year for Tesla stocks. The company saw an almost 55 per cent gain in stock price, which propelled Tesla’s valuation above $1 trillion.
Disclaimer: Scott does not own shares of Tesla (TSLA), and has no plans to initiate a position within 72 hours.