Tesla TSLA Gets PT Boost $980 from First Shanghai as Model Y Enters Year of Skyrocketing Deliveries

Photo: Tesla China

Chinese firm First Shanghai Securities Limited has upgraded Tesla (NASDAQ: TLSA) stock to Buy from Hold and raised their price target to $980 from $380. The firm wrote that the company's peak vehicle production capacity is over one million, and Model Y is entering a year of skyrocketing deliveries.

First Shanghai wrote in its report that Q4 2020 revenues exceeded market expectations and amounted to $10.744 billion, up 46% over the same period last year. Q4 GAAP net income was $270 million, reaching six consecutive quarters of profit. The company's total gross profit in Q4 decreased due to several factors:

1) commissioning of the production line, including S/X restyling; conversion to single-piece rear casting Model Y and 3;

2) the instability of the supply chain, which is affected by the epidemic;
3) increase in the value of shares and related payments to Tesla CEO.

However, some of these factors paved the way for higher gross margins, says First Shanghai.

• the Fremont Model S and X production lines were suspended in Q4 for refurbishment. But the new Model S will arrive in Q1, while the Model X will arrive later;
• machines for the single-piece rear casting for model Model Y has also been debugged;
• deliveries of the Model Y from the Shanghai factory began in the second half of January, and orders placed now will not be completed until June;
• construction of the Berlin plant is progressing as planned, and Model Y production will begin in the second half of the year;
• the plant in Texas is expected to begin production of the Model Y and a small number of Cybertrucks in the second half of the year.

 

The firm is also making a revaluation based on Tesla's annual delivery of 20 million units in 2030, and a battery production capacity of 3 TWh. Given Tesla's Q4 and 2020 results and the company's 2021 outlook, First Shanghai is raising its price target to $980, and updating its rating to Buy from Hold.

H/T @SawyerMerritt/Twitter

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