Having taken a break from the big rally so far this year, Tesla (NASDAQ:TSLA) stocks have resumed their upward trajectory, and there is an upcoming catalyst that could sustain the rally. On Wednesday (March 1), the EV leader will hold an investor day at Gigafactory Texas.
There could be plenty of fireworks on offer that could “help the stock continue to rank higher,” says Deutsche Bank analyst Emmanuel Rosner. “We expect the company to introduce Master Plan 3 and present the key drivers of its long-term growth strategy, and in particular its 3rd generation vehicle platform that can support more future vehicles and segments at a lower price point,” the analyst further said. .
Rosner also expects that there will be updates on the FSD software V11, the hardware HW4 and the latest on the production of the Cybertruck/Semi. An update to the Model 3 (Project Highland), and a “ramp-up” of the energy storage segment should also be announced. In addition, the analyst expects Tesla to discuss the role of internal battery manufacturing technologies, capacity expansion and steps to obtain raw materials to meet volume and cost targets.
Rosner also highlights some possible announcements that could have a major impact on the share. With Tesla’s intention to lower the costs needed to produce its vehicles – its next-generation platform potentially targets $20,000 in COGS (cost of goods sold) per vehicle – the company can provide details on its “lower cost trajectory” and how it intends to to achieve the expected scale and cost.
Timelines regarding “specific vehicle and segment launches” based on the next-gen platform could also drive the bull case further, while similarly the rollout plans for FSD V11 and Hardware 4 which will “support and enhance the autonomous capabilities of the next-gen platform and potentially support robotic axis » may be announced.
A further boost can also come from information on share buybacks. In October, Elon Musk stated that Tesla could carry out 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 toward much lower costs for its next platform,” Rosner summarized, “this would greatly enhance competitive advantage, deepen the moat around the product, and likely clear the way to multi-million unit shipments before the end of the decade.”
With these potential catalysts to look forward to, Rosner has raised his price target from $220 to $250, suggesting shares will climb 20% higher in the months ahead. Rosner’s rating remains a buy. (To watch Rosner’s track record, click here)
So, that’s Deutsche Bank’s opinion, what does the rest of the street think is in store for Tesla? Based on 22 buys, 6 holds and 3 sells, the stock has a consensus rating of moderate buy. However, at $204.96, the average target implies that shares will remain bound 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 an investment.