Why This Tesla Analyst Is Turning Bullish

Although Tesla Inc’s TSLA stock valuation is rich, the company seems to have crossed the electric vehicle chasm and is now aggressively foraying into storage, according to Canaccord Genuity.

The Tesla Analyst: Jed Dorsheimer upgraded the rating for Tesla's stock from Hold to Buy, while raising the price target from $419 to $1,071.

The Tesla Thesis: Dorsheimer said the company could achieve accelerated growth in the energy generation and storage business, with revenue surging to an estimated $8 billion in 2025 with gross margins equal to or greater than its BEV business, which is at 25%.

“Tesla’s focus on first-principle engineering we believe will radically change the battery market, enabling the company to further the lead in BEVs and expand into the solar and home energy markets with its Powerwall products,” he wrote in a note.

“Battery supply constraints will begin to alleviate in 2022, as the new 4680 cell design production comes online in Giga Nevada, Texas, and Berlin, and with partners Panasonic and LG. Ample battery supply will allow TSLA to meet its new aggressive Powerwall campaign, as well as Powerpack, and Megapack in full scale, often paired with solar installations,” the analyst said.

TSLA Price Action: Tesla's stock traded higher by 2.9% to $697.06 at publication time.

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