Tesla, Inc. (NASDAQ: TSLA) shares have picked up some momentum in recent sessions as the electric vehicle giant prepares to release its quarterly results.

The Tesla Analyst: Jefferies analyst Philippe Houchois maintained a Buy rating on Tesla shares and raised the price target from $850 to $950.

The Tesla Thesis: Modeling a linear ramp of production at the low end of the guided 5,000 to 10,000 units/week for two similarly sized new facilities in Austin and Berlin; the addition of at least 500,000 units of actual capacity and 200,000 to 250,000 actual units is likely in 2022, Houchois said in a note.

Third-quarter deliveries data showed China domestic sales of 73,6000 units, allaying recent concerns about domestic demand, the analyst said. Annualizing third-quarter output yields production of 530,000 vehicles in China suggests Giga Shanghai is running at more than full capacity, he said.

Despite an "immature" production network, with cross continent shipping accounting for 20% of total production, Tesla delivered slightly more units than produced, Houchois.

Localizing production should improve delivery timing and associated transit costs, the analyst said.

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Although Tesla hasn't been immune to supply disruptions in 2021, it has outperformed peers in sourcing semiconductors, he said.

This is partly due to the company in-sourcing chip design with an ability to effect rapid re-design and secure more direct sourcing than peers, Houchois said.

Following further analysis of Tesla's third-quarter deliveries data and the information gleaned from various sources on the soon-to-be launched Berlin facility, Jefferies raised its 2022-23 revenue estimates by 6% and EBIT estimates by 9%-7%, the analyst said. The revision is premised on a higher capacity ramp and sustained demand, he added.

The estimates include some modest support to margin from software subscriptions, including full-self driving.

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The free cash flow estimate has been raised by 7%-4% due to support from working capital inflow on accelerated growth, Houchois said.

For the third quarter, Jefferies forecast automotive and group revenue of $12.5 billion and $14.5 billion, respectively, on unit ASP of $49,000 and an auto gross margin of 26.1%.

Along with zero-emission vehicle income of $250 million, the firm forecasts EBIT of $1.6 billion, non-GAAP earnings per share of $1.47 and free cash flow of $1.4 billion.

TSLA Price Action: Tesla shares were up 1.91% at $833.98 Friday morning.

Related Link: Why Tesla's Update To Autopilot Software Is Being Questioned By Federal Traffic Safety Regulator

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