Elon Musk Forces Bears Back Into 'Hibernation' As Tesla Delivers In 'Epic Fashion'

Tesla Inc. TSLA quelled the Street anxiety with stellar fourth-quarter results on Wednesday.

The Tesla Analyst: Wedbush’s Daniel Ives maintains an Outperform rating on Tesla shares, raising the price target from $175 to $200. The analyst attributed the price hike to improved visibility and the demand trajectory.

The Tesla Thesis: “In Tesla’s Super Bowl last night, Musk & Co. delivered in epic fashion with demand that is currently 2x production coming out of the gates in 2023 and laying out a 1.8 million delivery bogey for the year,” analyst Ives said in a note.

This was exactly what the bulls wanted to hear and the “bears (for now) will go back into hibernation mode."

See Also: Best Electric Vehicle Stocks

The analyst said Tesla gave a hittable delivery target for the year in the 38% range. He, however, views the outlook as conservative, given demand is rebounding meaningfully in China following the recent Model Y/3 price cuts.

The analyst shrugged off the 200-basis-point miss in automotive gross margin and said the better-than-feared margin guidance for 2023 should allay Street fears.

Tesla’s strategy of sacrificing margins for higher volumes in the near term, the analyst said, is the “right strategic poker move” to retain customers and ward off competition.

Musk’s acknowledgment of the complex spider web relationship between Twitter and Tesla will likely elicit a mixed reaction from investors, Ives said. The Twitter noise, however, is beginning to dissipate, he added.

“We walk away from this call incrementally more bullish on Tesla into 2023,” the analyst said.

Price Action: Tesla shares rose 6.56%, to $153.9, in premarket trading on Thursday, according to Benzinga Pro data.

Read Next: Elon Musk Says Tesla's Closest EV Competitor Won't Emerge From US — But This Country