By Senad Karaahmetovic
Deutsche Bank analyst Emmanuel Rosner added Tesla (NASDAQ:TSLA) shares to the bank’s short-term Catalyst Call Buy List as investors prepare to hear from the electric vehicle (EV) maker on July 20.
The analyst sees the potential for Tesla to report higher-than-consensus numbers for margins, “driven by good cost execution and continued pricing strength.”
Rosner also expects the EV titan to reiterate its full-year deliveries growth outlook of 50%, “suggesting total volume of approximately 1.4m units and implying considerable volume ramp in the second half,” he told clients in a note.
While Rosner expects Tesla to report on challenges it faced in Q2, he also says COVID-related shutdowns and Texas and Berlin ramping issues are largely priced in.
“We think the YTD 30%+ pullback in the stock largely reflects supply issues that are fast improving, providing a compelling opportunity to accumulate the stock into 2H and 2023 where volume growth and margin expansion could be meaningful,” the analyst added.
Rosner is bullish on Tesla stock even in the case that the 2Q margin misses estimates.
“We think investors should take advantage of the stock pull-back to get involved given margin pressure faced in the quarter would be temporary and longer-term operating leverage stays intact,” Rosner concluded.
Tesla shares are up 2% in preopen Monday.