Tesla (TSLA) is the electric vehicle (EV) pioneer, on this there is no debate. However, with legacy auto makers realizing electric vehicles are the future, common wisdom dictates Tesla is set to face increasing competition from the old timers.

This notion is given short shrift by Jefferies' Philippe Houchois.

“For some time the narrative has been legacy OEMs closing the gap; we see little evidence as Tesla continues to challenge at multiple levels,” the 5-star analyst said. “We raise EBIT and margin estimates in contrast with doubts about earnings momentum across legacy OEMs.”

Following additional analysis of Q3 data and based on “various sources” of information concerning the soon-to-be launched Berlin factory, Houchois has increased 2022-23 EBIT estimates by 7-9% on higher “capacity ramp and sustained demand.” With the expectation of 1.3-1.7 million units in 2022-23, the analyst also raised the 2022-23 revenue estimates by c.6% on “higher auto deliveries.”

Houchois’ reasoning is based on the new Austin and Berlin facilities’ production rate coming in at the “the low end of guided 5-10k units/week.” This should result in a “solid” production rate of 200,000 to 250,000 of actual units in 2022, and in one year should see the company attain capacity of “at least” 500,000 units to reach 1.6 million in total.

And despite a still "immature" production network with cross continent shipping making up around 20% of total production, year-to-date Tesla has delivered “slightly” more units than produced. “Localizing production,” says Houchois, “Should improve delivery timing and associated transit costs.”

The analyst also believes any concerns about soft demand in China can be put to rest following Q3’s delivery numbers, while the supply disruptions felt across the globe have affected Tesla too, but it has “out-performed peers in sourcing semi-conductors.”

As such, Houchois lifted his price target on Tesla stocks to $950 (from $850), suggesting shares have room for a 9% uptick in the year ahead. No need to mention, Houchois’ Buy rating stays as is. (To watch Houchois’s track record, click here)

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But as ever with Tesla, the Jefferies analyst’s take is one of many varied ones on Wall Street. While 11 other analysts join Houchois in the bull camp, with an additional 7 Holds and Sells, each, the analyst consensus deems TSLA stock a Hold. Moreover, the average price target is resolutely bearish; at $699.81, the shares are anticipated to be changing hands for ~20% discount a year from now. (See Tesla stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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