Here's Why Credit Suisse Sees Tesla Triumph Amid Odds

Author: Anusuya Lahiri | June 24, 2022 12:58pm

Credit Suisse analyst Dan Levy maintained Tesla Inc (NASDAQ:TSLA) with an Outperform and cut the price target from $1,125 to $1,000 (37% upside).
Levy expected Tesla's 2Q deliveries of 242,000, missing the consensus of ~280,000 due to the Shanghai COVID shutdown.
Moreover, given the lower delivery outlook, the associated margin impact, and an expected Bitcoin impairment, he reduced the 2Q EPS estimate to $1.10 from $2.06, below the consensus of $2.08.
Nevertheless, he remained positive on Tesla, as the long-term fundamentals were intact. He noted that the widening supply constraints would likely extend Tesla's lead over other OEMs in the race to EVs.
Levy expected the robust fundamentals ahead should outweigh the near-term challenges for Tesla, like the recent growth sell-off, production disruptions in China, lingering semiconductor shortage, and magnified inflationary pressures.
He believed the long-term case for Tesla was evident.
Tesla remained the global leader in EVs amid rising supply chain risks.
Tesla's lead in vertical integration and prior EV experience amplified its lead over other automakers in the race to EV.
Levy reaffirmed his Outperform rating and remained positive on the stock. The Price Target cut reflected a higher discount rate.
Price Action: TSLA shares traded higher by 4.06% at $733.87 on the last check Friday.