By Dhirendra Tripathi
Investing.com – Tesla stock (NASDAQ:TSLA) traded 3.8% higher Monday as Piper Sandler analyst Alexander E. Potter raised the price target to $1,350 from $1,300.
The shares popped even as sales of the company’s China-made vehicles fell 15% month-on-month.
The new price target is 51% higher than the stock’s current level of $892.
Potter continues to be overweight on the stock. He said the brokerage is focusing on five key topics in assessing the stock -- namely deliveries, gross margin, operating expenditure, software and cash flow.
He expects the world’s most valuable automaker to make 1.58 million deliveries in 2022, a 69% growth on top of 936,222 units delivered in 2021.
According to reports, while the analyst believes Tesla's gross margin "was a success story" in 2021, this year is hard to predict. Potter says Tesla's cash flow shields it from macro uncertainty.
Tesla’ gross operating margin jumped more than 4 percentage points to 25.3% in 2021.
Model Y is the biggest near-term growth driver, while the chip supply is the limiting factor, Potter wrote in his report.
According to data by China Passenger Car Association, Tesla sold 59,845 China-made vehicles in January compared to 70,847 of them in the previous month.
In comparison, Chinese rival Xpeng (NYSE:XPEV) delivered over 10,000 vehicles for the fifth straight month, recording 12,922 deliveries in January. Nio (NYSE:NIO) delivered 9,652 vehicles in the month, up 34% year-over-year. Li Auto (NASDAQ:LI) delivered 12,268 Li ONEs, a 128% jump year-on-year.