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Tesla Upgrade: Why UBS Thinks TSLA Stock Has 50%+ Upside

Investor Place · 06/09/2022 12:20

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Tesla (NASDAQ:TSLA) stock is rallying 3% after a UBS analyst raised its rating on the shares to “buy” from “neutral” and kept a $1,100 price target on the name. In late morning trading, TSLA stock was changing hands for $750 per share.

Calling Tesla’s prognosis “stronger than ever before,” UBS’s Patrick Hummel cites the company’s “structural competitive edge” in obtaining key components and its highest-ever backlog as two reasons for his upgrade. Additionally, Hummel noted the automaker’s margins are climbing.

UBS Urges Investors to “Be Bold” on TSLA Stock

The analyst predicts Tesla’s earnings per share will jump to $28 in three years. According to Hummel, now is the time to “be bold” when it comes to TSLA stock.

“We expect Tesla’s vertical integration in semiconductors, software and battery to result in superior absolute growth and profitability in the years ahead,” the analyst contended.

He added that investors are underestimating Tesla’s superior “growth and profitability” compared to its electric vehicle (EV) competitors, in the words of Seeking Alpha.

Louis Navellier and Credit Suisse Are Bullish on Tesla

On June 8, InvestorPlace columnist and renowned investor Louis Navellier contended that TSLA stock is “still a smart buy” for investors even after its CEO, Elon Musk, recently wrote he had a “super bad feeling” about the economy. Navellier believes that, because Tesla caters to wealthier auto buyers, the impact of any recession on TSLA stock will be limited.

Another recent bullish take on Tesla came from Credit Suisse analyst Dan Levy on May 27. Like Hummel, Levy remains upbeat about the automaker’s long-term outlook and views the retreat of its shares as a buying opportunity.

However, the analyst warned that, primarily due to supply issues caused by production difficulties in Shanghai, the company’s second-quarter results will likely be less impressive than its Q1 numbers. Nonetheless, he kept a $1,125 price target and an “outperform” rating on the name.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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