Goldman Sachs Suggests Investors Buy Tesla Ahead of Big Rally
Tesla stock price regained the majority of losses that it had incurred during the coronavirus selloff as analysts and investors are showing confidence in its production abilities.
Its share price rebounded more than 60% from lows; the stock bottomed around $390 last month and it is currently trading above $700 mark.
While the stock price is still down from an all-time high of $970, Goldman Sachs recommends investors to consider Tesla ahead of a big rally.
Goldman Sachs analyst Delaney believes that the combination of Tesla’s product leadership and early mover advantage would help share price in rallying. The analyst also pointed out the demand and supply of the Model Y with the price set to be lower than the Model X.
“We are positive on Tesla because we believe that the company has a signiﬁcant product lead in EVs, which is a market where we expect long-term secular growth,”
Notes Goldman Sachs analyst Mark Delaney.
The firm also appreciated its valuations compared to peers, thanks to high revenue growth potential and a strong EBITDA margin. Goldman Sachs provided a price target of $864 for Tesla stock.
The company has already started production across China and it plans to resume operations across the United States from the next month. Its China car registration soared 450% in March from the previous month. Meanwhile, auto sales in China dropped 43.4% in March from February.
Credit Suisse has also increased its price target for Tesla stock. Its analyst Dan Levy claims Tesla has a larger competitive edge relative to legacy automakers as coronavirus disruption will make it more difficult for big automakers to shift towards electric vehicles.
Tesla has delivered close to 88.4K vehicles during the first quarter compared to the consensus estimate for 79.9K deliveries. The company expects to reach its full-year targets despite lockdowns and factory closure.