Canaccord Genuity (TSX:CF, LSE:CF) has reiterated its "Buy" rating and raised its price target for electric vehicle manufacturer Tesla Inc (NASDAQ:TSLA) from US$815 to $881 following a visit to the company’s Fremont factory in California.
In a note, Canaccord analyst George Gianarikas wrote that during analysts' visit to the factory on Friday, they were “mesmerized by the factory’s chaotic symphony and employee morale.”
Gianarikas also noted that they were impressed by management’s ability to push the boundaries of what could be achieved at the factory given its limited size relative to Tesla’s other locations.
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“Tesla’s manufacturing proficiency sets it apart from its tech peers and from other auto OEMs, who are years behind in terms of working out idiosyncrasies in building EVs versus ICE while managing a new supply chain reality,” he wrote.
Further, he noted that Tesla sat in an enviable position when it comes to securing materials critical to EV production, such as lithium and rare earth materials, due to its robust supply relationships with materials suppliers.
“While macroeconomic factors and recent price increases can certainly impact order rates, we estimate Tesla’s EV momentum and competitive lead - from manufacturing to materials procurement, to autonomy - is secured for some time,” Gianarikas wrote. “With additional offerings in solar, energy storage, and more to come, Tesla remains the sustainability behemoth.”
Tesla shares were up about 5% at 11:45 am on Monday, trading at about US$908 per share.
Contact the author at emily.jarvie@proactiveinvestors.com
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