In the midst of the tumultuous landscape surrounding Tesla, Inc. (NASDAQ:TSLA), George Gianarikas, an analyst from Canaccord Genuity, stood out on Tuesday by reaffirming his bullish stance on the company. Gianarikas’s analysis shed light on the prevailing extreme negativity surrounding Tesla, highlighting a recent surge in negative feedback and bearish sentiment as indicative of an imbalanced perception in the market.
Despite acknowledging some valid concerns raised by skeptics, Gianarikas emphasized that Tesla’s challenges in the first quarter primarily stemmed from supply constraints rather than underlying demand issues. This nuance suggested that the prevailing sentiment might be misinterpreting Tesla’s current fundamentals, potentially leading to undervaluation in the market.
Gianarikas’s in-depth analysis suggested that supply limitations could have resulted in a substantial shortfall of approximately 95,000 units in first-quarter deliveries. This observation challenged the notion of weak demand and instead pointed to operational hurdles impacting Tesla’s production capacity.
Moreover, Gianarikas highlighted the potential for positive earnings revisions throughout 2024, driven by factors such as margin expansion due to the cessation of price reductions and the anticipated ramp-up in production of the Cybertruck. These factors, if realized, could significantly bolster Tesla’s financial performance and investor confidence.
In response to the prevailing challenges, Gianarikas adjusted his delivery estimates for Tesla, revising his first-quarter delivery forecast downward to 420,000 units. This adjustment, while reflecting the current operational constraints, also underscored the resilience of Tesla’s demand despite external pressures.
Additionally, Gianarikas underscored Tesla CEO Elon Musk’s strategic initiatives, such as the directive for employees to install and demonstrate full self-driving Beta for customers in North America. This move, coupled with the offer of one month of free Full Self-Driving (FSD) to all U.S. Teslas starting this week, aimed to enhance customer engagement and accelerate the adoption of Tesla’s autonomous driving technology.
However, Gianarikas also acknowledged the need for additional measures, such as price cuts, to further drive FSD penetration and bolster revenue streams. This recognition of ongoing challenges reflected a balanced assessment of Tesla’s opportunities and risks in the evolving automotive landscape.
Despite the hurdles, Gianarikas maintained his Buy rating and a $234 price target for Tesla, suggesting a significant upside potential of approximately 32%. This vote of confidence underscored Gianarikas’s belief in Tesla’s long-term growth prospects and its ability to navigate through short-term challenges.