Deutsche sees 'compelling opportunity' in Tesla after 30% pullback - InvestingChannel

Deutsche sees ‘compelling opportunity’ in Tesla after 30% pullback

Deutsche Bank analyst Emmanuel Rosner placed a “Catalyst Call: Buy” on shares of Tesla as a short-term investment idea ahead of the company’s Q2 results on July 20. Tesla could report potential upside to “low” Street expectations for margins, driven by good cost execution and continued pricing strength, Rosner tells investors in a research note. The analyst expects management to reiterate its full year deliveries growth of 50%, suggesting total volume of approximately 1.4M units and implying “considerable volume ramp” in the second half of the year. The Street’s anticipated sequential profit deterioration of greater than $1.5B “more than captures the large headwinds faced in the quarter,” from COVID-related shutdowns in China, costs associated with closed-loop productions, and ramps in Texas and Berlin factories, says Rosner. He thinks Tesla’s 30% year-to-date pullback largely reflects supply issues “that are fast improving.” The selloff provides a “compelling opportunity to accumulate the stock” into the second half and 2023 where Tesla’s volume growth and margin expansion “could be meaningful,” contends Rosner. He has a Buy rating on the stock with a $1,125 price target.

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