Tesla’s fourth-quarter report points to even more gains for the electric vehicle maker, Goldman Sachs said Thursday. Analyst Mark Delaney reiterated his $200 price target and buy rating on Tesla. That target implies upside of nearly 40% from Wednesday’s close. Tesla reported fourth-quarter earnings and revenue that topped analyst projections. CEO Elon Musk also said during a conference call that the company could produce 2 million vehicles in 2023. Shares of the EV maker popped about 8% on Thursday. “Given the focus of investors on Tesla’s delivery volumes in particular (and the importance of volume for its vertically integrated model and the cost benefits long-term of its newer factories when at scale), we see the order strength as the most important takeaway from the call,” Delaney wrote in a client note. “While we believe this rate of orders may not be sustained in light of the weak macroeconomic environment, it would suggest the company is tracking well to our 1.8 mn delivery estimate,” Delaney added. Tesla has been cutting prices in recent months, raising concern over the company’s margins going forward. However, it noted Wednesday that those price reductions helped support demand for vehicles. Delaney also pointed out that Tesla has been able to grow EBIT margins despite declining average selling prices per vehicle, which he said is a big positive for the stock going forward. The analyst added that Tesla also remains on track to start the production of its Cybertruck in Texas this year, which could serve as another catalyst for the stock. “However, Tesla also commented that it would be hard in 2023 to get back to its prior low of ~$36K in cost of goods sold per vehicle (which it did in 2021) with lithium costs a particular yoy headwind,” he said. Tesla shares have fluctuated dramatically during the past year, as questions intensify over Elon Musk’s involvement in the company and as Twitter CEO. The company’s stock has gained 17.25% in 2023, and jumped 9.8% in premarket hours after it announced its earnings report. However, shares have fallen approximately 53.78% over the past 12 months. —CNBC’s Michael Bloom contributed to this report.
Goldman Sachs sees Tesla rallying nearly 40%, points to three positives for the stock