Tesla Inc (TSLA)

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Why This Tesla Analyst Thinks Worst May Be Behind For The EV Pioneer
by
Shanthi Rexaline, Benzinga Staff Writer
June 1, 2022 10:09 AM | 1 min read

A Mizuho Securities analyst sees Tesla bouncing back as supply chain challenges improve.
The new Gigas in Texas and Berlin may help counterbalance the production-constrained Shanghai plant.

What Happened: Tesla stock could rocket higher in 2022 as the bear-case scenario fades, Mizuho Securities analyst Vijay Rakesh said in a note on Tuesday, according to Tesmanian.

Rakesh was commenting after Tesla hosted him at the Fremont, California factory.

The analyst said Tesla faces near-term headwinds as Giga Shanghai, which makes up about 40-50% of its total capacity, has yet to produce at pre-lockdown rates. This, however, sets Tesla up for a strong second-half rebound, he added.

April deliveries may have been at 40,000 units, down 22% from January's 51,000 units, Rakesh noted. This, according to the analyst, could lead to a sequential revenue decline in the June quarter.

"That said, we believe a potentially stronger SepQ/DecQ rebound is possible with improved supply chains and Berlin ramping," Rakesh said.

Why It's Important: Tesla's Giga Shanghai has begun running two shifts since last week, and it is rumored that production at the plant may have returned to 70% of pre-COVID levels.

The opening of two new Gigas in Texas and Berlin may take some pressure off the production-constrained Shanghai plant. Giga Shanghai, however, is important, not only from the perspective of output, but also for margins.

Rakesh reaffirmed his Buy rating and $1,300 price target for Tesla stock.