Shares of Tesla were rebounding Tuesday after UBS raised its price target on the stock, calling the electric-vehicle company the “undisputed leader” in the market.
Analyst Patrick Hummel increased his price target to $1,000 from $725, saying global demand for electric vehicles will propel the company to continue beating expectations in 2022. Hummel maintained a Neutral rating on the stock.
The electric-vehicle manufacturer had a rough Monday, with the stock closing at $1,009.01, slipping dangerously close to its third bear market of the year. Tesla (ticker:TSLA) was faring better Tuesday, with shares rising 3.7% to $1,046 in premarket trading.
Of the 41 analysts surveyed by FactSet, 17 rate the stock at Buy or Overweight, 12 rate it a Hold, and 12 rate it a Sell. The average price target is $851.09.
Tesla’s access to chips and batteries through vertical integration sets it apart from its competitors, helping the company cement market leadership with about 20% global EV share, the analyst said.
“We’ve raised estimates sharply to reflect this undisputed leadership, however, current valuation fully reflects such steep curve,” Hummel wrote in a research note Tuesday.
The title of Hummel’s research note on Tesla was: “Cementing leadership as EV market takes off: New $1,000 price target (from $725) – no rival to get even close to Tesla in 2022.”
Hummel is forecasting Tesla’s car sales to grow from 894,000 in 2021 to 1.4 million in 2022, and reach 2.9 million by 2025, more than competitors BMW (BMW.DE) or Mercedes-Benz.He expects EVs in general to account for 50% of global car sales by 2030.
A big part of Tesla’s advantage is the software’s scalability, which can drive a big revenue pool with even higher margins well beyond 2025, Hummel said.
“Software is the next battleground in the global car industry, and no other carmaker is closer to monetize fully autonomous driving for everyday use, and the scalability of Tesla’s technology creates the biggest software-driven revenue opportunity in the industry,” he wrote.
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