Credit Suisse doubles Tesla (TSLA) price target to $800, maintains ‘Neutral’ rating

Credits Suisse recently updated its outlook on American electric car maker Tesla (NASDAQ:TSLA), with analyst Dan Levy doubling his price target for the company to $800 per share, up from his previous estimate of $400 per share. Levy also kept his “Neutral” rating on TSLA stock, despite his optimistic forecast on the electric car maker. 

Levy provided a number of reasons behind his outlook on Tesla. For one, the noted that capacity expansion is at the core of 2021’s priority list, allowing Tesla to unlock further volume growth. The Credit Suisse analyst remarked that he expects Tesla to have an installed capacity of 1.44 million vehicles per year by the end of 2021. This is a notable jump from the company’s existing capacity of about 840k vehicles in 2020. 

“The added capacity underscores our forecast for 2021 deliveries of 853k vs consensus of 791k. While the Berlin launch will take longest, we believe this is the highest priority—enabling Tesla to cut price and thus better capitalize on the Europe EV opportunity, which is ground zero for global EV inflection…similar to what it did in China in 2020, with a 30% cut in Model 3 price,” Levy wrote. 

Apart from his expectations for the current year, Levy noted that Credit Suisse is now forecasting 5.1 million units of volume by 2030, a significant growth considering that the electric car maker was only able to produce and deliver half a million cars in 2020. Levy also mentioned other opportunities in Tesla’s business that rarely receive attention, such as its Energy division, its Robotaxi network, and its in-house insurance service. 

What is quite remarkable about Levy’s current $800 per share price target is that it translates to $4,000 per share pre-split. Prior to Tesla’s 5:1 split last year, no one from Wall Street save for ARK Invest’s Cathie Wood gave the electric car maker a price target as optimistic as $4,000 per share. Even Levy’s previous estimate, which stood at $400 or $1,600 per share pre-split, would have been insanely bullish prior to Tesla’s 5:1 split. 

Disclaimer: I am long TSLA.

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