Tesla Inc TSLA's record quarterly deliveries may not have swayed an analyst from JPMorgan to shed his bearish stance, but all the same, he has not shied away from giving credit where it's due.
The Tesla Analyst: Analyst Ryan Brinkman maintained an Underweight rating on Tesla shares but increased the price target from $180 to $215.
The Tesla Thesis: Tesla's better third-quarter deliveries differentiate it from other automakers, which have struggled to secure a sufficient supply of semiconductors, analyst Brinkman said.
This suggests solid company-specific execution in this area as well as strong underlying demand, the analyst said.
JPMorgan raised its third-quarter and full-year estimates to account for stronger-than-expected third-quarter global deliveries.
Related Link: Why Tesla's Q3 Numbers Are 'Eye Popping' and Hard to Poke Holes In
The new price target, Brinkman said, continued to imply material downside from current levels but is justified. It values Tesla as the second-largest automaker behind Toyota Motor Corp TM and ahead of Volkswagen AG VWAGY, he added.
"Tesla fundamentals, including unit volume outlook, continue to improve, although its present valuation in our view continues to demand even more," JPMorgan said. The firm's unit volume estimate of 854,000 for Tesla in 2021 is the 18th largest. Toyota, with a market cap of $290 billion compared to Tesla's $776 billion, is estimated to sell 9,864,000 units, it added.
General Motors Company GM and Ford Motor Company F, with market caps of merely $77 billion and $56 billion, respectively, are estimated to produce 4,161,000 and 3,551,000 vehicles in 2021, the firm said.
In opposition to JPMorgan's view, BofA Securities analyst John Murphy said as long as the company can keep funding outsized growth with almost no-cost capital driving capacity expansion, its high stock price will be justified.
Murphy has a Neutral rating and an $800 price target for Tesla shares.
Tesla Price Action: At last check Monday afternoon, Tesla shares were up 1.05% at $783.37.
Photo by Austin Ramsey on Unsplash
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