UBS released an investment research report today, raising Tesla’s target stock price from US$725 to US$1,000. UBS believes that Tesla will continue to dominate the electric vehicle market in 2022 . UBS analyst Patrick Hummel said in the report: Through vertical integration, Tesla can better obtain chips and batteries. Compared with most competitors, this is Tesla’s key Advantages that should help consolidate its market leadership.
To this end, UBS continues to maintain a neutral rating for Tesla stock and raises its target stock price from $725 to $1,000. The target stock price is slightly lower than Tesla’s closing price of $1,009 this Monday. UBS made this decision at a time when competitors such as the electric car startup Rivian have gained strong interest from investors, and traditional automakers such as General Motors are committed to catching up with Tesla’s leading position in the electric car market.
But UBS believes that Tesla will continue to dominate the market next year. UBS stated in the report: In 2022, there will still be no competitor close to Tesla. UBS predicts that Tesla’s car sales will reach 1.4 million in 2022, and this year is expected to be 894,000. UBS also believes that Tesla’s gross profit margin will be higher next year. In addition, UBS also stated that with its leading position in the software field, Tesla will eventually become the most profitable automaker.
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Hummel stated in the report: Software is the next battlefield for the global automotive industry. No other automaker is closer to using fully automated driving for daily use (commercialization). In our opinion, Tesla’s technology is Scalability will create the industry’s largest software-driven revenue opportunity. Although optimistic about Tesla’s future prospects, UBS also pointed out that its target price is not higher than $1,000, because much good news has been reflected at current levels.
Hummel said: We believe that Tesla’s valuation has reflected the expected growth, including a higher profit margin, large-scale software revenue pool. This year, Tesla’s stock price has performed better than the broader market. The data shows that the S&P 500 index rose by 22.3%, while Tesla’s rose by 43%.