Investor's Corner

Tesla (TSLA) should be bought “on any near-term weakness,” analyst says

Tesla Roadster at Tesla Battery Day 2020 Credit: @BLKMDL3 | Twitter

Tesla (NASDAQ: TSLA) Battery Day did not win over Wall Street analysts based on the fact that the company’s announcements will take between a year and eighteen months to take effect. The developments from the electric automaker proved to be monumental for the company’s supporters, but not from financial skeptics. A slight pullback in TSLA stock price may not have been expected by many, but Oppenheimer’s Colin Rusch stated that it is the perfect time for investors to purchase more shares of the electric car company’s stock.

Rusch indicated that “any near-term weakness” from TSLA stock is an excellent opportunity to buy. While Tesla stock price dropped around 9% on Wednesday, just a day after the company’s Battery Day event, Rusch says there is nothing to be worried about.

Tesla laid out a blueprint for a “robust reimagining of battery design, manufacturing, and performance,” Rusch wrote in a note to investors. Not only did Tesla’s presentation detail an advancement with a newly-sized battery cell that has higher energy density, power, and range capabilities, but it also revealed that a $25,000 EV would be coming within the next three years.

Tesla debuts new 4680 battery cell: 500% more energy, 6X power, range increase

Additionally, capacity is expected to increase by 20-times by the year 2030. Higher production of battery cells on Tesla’s end will ultimately decrease the price of their automobiles and energy storage products. The mass-production of the cells is expected to increase over the next several years, while Tesla also plans to be more efficient in using space.

“We are impressed with the ambition of the endeavor and believe this roadmap charts ongoing technology and cost leadership for [Tesla] enabling sales into the entire LDV market,” Rusch’s note also said.

If it were up to Rusch, any potential drawback is an opportunity for investors to receive a discount on TSLA stock, which he believes will grow in the future.

“While limited details may weigh on shares, we would be buyers on any near-term weakness,” Rusch noted.

While Battery Day’s developments were more long-term goals than anything, they indicate that Tesla is doing an excellent job with increasing manufacturing efficiency, which CEO Elon Musk said would be a primary focus of the company moving forward. While Musk expects other car companies to catch up in terms of range and performance in the EV sector, eventually, he stated that Tesla would be “head and shoulders” ahead of other companies in terms of manufacturing efficiency during the event.

Rusch did not adjust his $451 price target, and he reiterated the “Outperform” rating that he has held on TSLA stock for two years, Marketwatch reported.

Disclaimer: Joey Klender is a TSLA Shareholder.

Tesla (TSLA) should be bought “on any near-term weakness,” analyst says
To Top