Written by Cláudio Afonso | LinkedIn | X
Tesla shares jumped 11% Monday morning after Piper Sandler analyst Alexander Potter reaffirmed the firm’s $450 price target, suggesting an upside of over 80% from Friday’s close.
While acknowledging that Elon Musk’s “political endeavors” have affected demand, the analyst said the primary driver of the year-over-year double-digit miss in vehicle deliveries is supply-related as Tesla transitions to the new Model Y.
“It would be naive to claim that Elon Musk’s behavior is having no impact on demand. All else equal, Musk’s political endeavors are probably a net negative for deliveries,” Alexander Potter noted.
“However: we think it’s incorrect when investors and/or journalists point to politics as the primary driver of Tesla’s double-digit y/y delivery declines (in Q1),” he added. “As illustrated on page 2, updated wait time figures suggest that SUPPLY is a bigger driver of the upcoming Q1 delivery miss.”
Piper Sandler reaffirmed the Overweight rating on the stock while noting that even with strong demand, production constraints would have limited results.
“Even if demand were infinite, Tesla’s Q1 deliveries would probably not have been much higher, due to multi-week shutdowns impacting all four of the company’s Model Y factories,” Potter wrote.
The analyst cites the upcoming entry-level model and the Cybercab rollout in select U.S. states as the next two main catalysts.
“With new products (apparently) on deck for an unveiling in the next few months — plus a robo-taxi launch in June – we reiterate our OW [Overweight] and $450 PT,”
Tesla said earlier this Monday that it is reworking its Full Self-Driving (FSD) software in China to comply with updated regulatory requirements, temporarily pausing a planned one-month trial that began on March 17.