Goldman Sachs Maintains Positive Outlook on Tesla TSLA

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Goldman Sachs maintains a positive outlook on Tesla. The team reiterates its Buy rating and $333.33 price target on TSLA shares after meeting with VP Investor Relations at Tesla, Martin Viecha.

Goldman Sachs sees great potential for electric vehicles in general and for Tesla in particular. The firm believes Tesla cars will appeal to consumers in the same way that other technological inflections (e.g. CRT to LCD TVs, and feature phones to smartphones) have. However, in the medium term, the EV industry may be limited in supply as the supply and assembly of new batteries/components take time to ramp up production.

The firm believes that software and services, especially Full Self-Driving (FSD), remain at the core of the company's focus. Following the recent major update to FSD Beta, the company will roll it out more widely in North America. Goldman Sachs wrote that it expect Tesla to increase profits in the medium term as it ramps up production of Model Y, as well as new factories in Berlin and Austin, and in the long term as software revenue increases.

Goldman Sachs wrote in its note:

“Tesla, given its leadership position in EVs (including its vertical integration and tight coupling of hardware and software, as well as its ecosystem of charging stations and brand), and its focus on clean transportation more broadly (given its solar and storage businesses) is well positioned to capitalize on the long-term shift to EVs. We expect Tesla to expand margins in the intermediate term as it ramps the important Model Y product as well as new factories in Berlin, Germany and Austin, Texas, and in the long-term as it increases its mix of software revenue.”

© 2022, Eva Fox | Tesmanian. All rights reserved.

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Eva Fox holds zero shares of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.