Shares of Tesla (TSLA) are on the rise on Monday after Piper Sandler analyst Alexander Potter raised his price target on the stock to $1,200 from $515 following "breakout year" and as he believes "fireworks aren't over" yet. Meanwhile, both NIO Inc. (NIO) and Xpeng (XPEV) have reported strong delivery numbers.
PIPER MORE THAN DOUBLES TESLA TARGET: Piper Sandler analyst Alexander Potter raised the firm's price target on Tesla to $1,200 from $515, while keeping an Overweight rating on the shares. 2020 was a breakout year for Tesla, but the "fireworks aren't over," Potter told investors in a research note. The analyst believes that even after a 10-times return over the past 12 months, investors should not be selling this stock. Potter's forecast for Tesla now implies 894,000 vehicle deliveries in 2021, eventually ramping to 9M-plus units in 2030. This level of production would rank Tesla among the top-three auto makers globally, he added. More important, the analyst argued that the company will see a steady ramp in full self-driving software adoption starting in 2030, with 50%-plus of all Tesla owners using the full self-driving package by the end of the 20-year forecast period. Potter believes this should have a big impact on margins, with Tesla's EBIT margin eventually exceeding 40%. Further, by the 2030s, he expects Tesla Energy to represent 20%-30% of revenue versus 6% today. Tesla is targeting "multi-trillion-dollar markets" so there "will always be new levers for growth," the analyst pointed out.
MOST NEGATIVE CATALYSTS PLAYED OUT: Wedbush analyst Daniel Ives upgraded Nikola (NKLA) to Neutral from Underperform with a price target of $25, up from $15. While some clear hurdles remain for Nikola to achieve its hydrogen and semi-truck vision over the next year, most of the negative catalysts have now played out, Ives told investors in a research note. The analyst's main concerns on Nikola were centered on the shifting General Motors (GM) partnership, Badger "hype" and execution risks. Ives sees a more balanced risk/reward looking forward, and believes Nikola's electric vehicle and hydrogen fuel cell ambitions are attainable in the semi-truck market. Further, the Biden administration and Democratic Senate's green initiatives "will be massive" around electric vehicle and hydrogen over the coming years and could significantly accelerate Nikola's build out ambitions, the analyst said.
ON THE SIDELINES: Deutsche Bank analyst Edison Yu initiated coverage of Li Auto (LI) with a Hold rating and $35 price target. Li has proven itself to be a "focused and efficient operator" as demonstrated by its margin and cash flow performance and "strong" sales, Yu tol investors in a research note. The analyst, however, started coverage on the sidelines to await more clarity on its battery electric vehicle and autonomous driving roadmap. Li Auto currently only sells a hybrid SUV and is an "early laggard" in advanced drive-assist display capabilities, Yu added. He believes management understands this and is likely accelerating internal developmental efforts on these fronts. Yu also thinks Li can get to 250,000 unit sales by 2025, including two battery electric vehicle models, with gross margin fluctuating in the low-mid 20% range through 2025.
NIO, XPENG DELIVERIES: NIO has provided its January delivery results. The company said it delivered 7,225 vehicles in January, a new monthly record representing a 352.1% year-over-year growth. The deliveries consisted of 1,660 ES8s, the company's six-seater and seven-seater smart electric SUV, 2,720 ES6s, its five-seater smart electric SUV, and 2,845 EC6s, the company's five-seater electric coupe SUV. As of January 31, cumulative deliveries of the ES8, ES6 and EC6 reached 82,866 vehicles.
Meanwhile, XPeng also announced its vehicle delivery results for January, saying it achieved a record monthly delivery of 6,015 Smart EVs in January, representing a 470% increase from January 2020, and marking the third consecutive month of record-breaking delivery numbers. Both the P7 smart sports sedan and the G3 smart compact SUV deliveries maintained momentum. Total January deliveries consisted of a record high 3,710 P7s and 2,305 G3s. Cumulative P7 deliveries reached 18,772 as of January 31. G3 deliveries exhibited a 118% increase year-over-year. The new version of P7's operating system, Xmart OS 2.5.0 was released to customers on January 26 this year, optimizing 200+ features and adding 40+ new functions including the navigation assisted highway autonomous driving solution NGP.
PRICE ACTION: In morning trading, shares of Tesla have gained almost 3% to $813.71, while Nikola has dropped about 1.5% to $22.75. Also lower, Li Auto and NIO have slipped over 3% to $31.25 and $54.91, respectively, and Xpeng is fractionally down at $48.05.
Tesla
+24.32 (+3.07%)
Nio
-1.68 (-2.94%)
Nikola
-0.04 (-0.17%)
XPeng
+0.3 (+0.62%)
Li Auto
-0.87 (-2.70%)
General Motors
+0.14 (+0.28%)