Tesla Stock Price Target Cut to $800 at Daiwa, Shanghai Lockdown Impact Estimated at Over 100k EV Units

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Tesla Stock Price Target Cut to $800 at Daiwa, Shanghai Lockdown Impact Estimated at Over 100k EV Units
Credit: © Reuters.

By Senad Karaahmetovic

Daiwa Securities analyst Jairam Nathan slashed the price target on Tesla (NASDAQ: TSLA ) shares to $800.00 per share from $1,150.00 to reflect the lockdowns in Shanghai and supply chain concerns impacting the ramp-up of Austin and Berlin factories.

The lowered price target also reflected lowered 2022 deliveries of 1.2 million electric vehicle (EV) units, down from the prior 1.4 million. The analyst projects that Tesla lost over 100,000 units in Shanghai and another 80,000 units in Austin/Berlin.

As such, the Shanghai impact is “bound to have a significant impact on margins and earnings,” Nathan told clients in a note.

Moreover, Nathan says that the slashed price target mirrors ”concerns around a) Tesla hitting its 50% volume growth goal in 2022; and b) any negative impact from Elon Musk’s proposed takeover of Twitter (NYSE: TWTR ), either on management of Tesla or on TSLA stock from a potential divestment.”

Still, Nathan remains bullish on Tesla.

“The lockdowns in China have not tempered demand for EVs, as reflected in the 34% YoY increase in BEV sales in April. Overall passenger vehicle sales declined 35% YoY. The higher BEV sales is despite Tesla’s negligible contribution during the period. BEV penetration in April stood at 22% compared to 17% in February. In Europe, alternate-powered vehicles including BEV’s, PHEVs and HEVs accounted for 50% of sales in 1Q:22 with BEVs accounting for 10% of sales. Charts 1 and 2 show EV penetration growth in both regions,” the analyst concluded.

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