The bank has a ‘neutral’ rating and a US$450 price target for Tesla.
Analyst Mark Delaney suggests the car maker’s grasp for market share will continue to be pivotal, specifically in regard to the rate of adoption for Model Y and expansion into China will boost sales and margins.
Tesla last night posted its fifth consecutive quarterly profit on record revenue of US$8.8bn beating analysts’ estimates thanks to an increase in vehicle deliveries.
The firm’s revenue rose to a record $8.77 billion, up from $6.30 billion a year earlier above consensus expectations for $8.36 billion. Excluding one-off items, Tesla posted a profit of 76 cents per share and net income of $331 million, or $874 million excluding stock-based compensation awards given to CEO Elon Musk.
Revenue from the sale of regulatory credits made up $397 million of revenue, without that Tesla would not have achieved a profitable quarter. So far this year, regulatory credits account for $1.18 billion, or 7% of Tesla's total automotive revenue.
The electric car maker also affirmed its target to deliver half a million vehicles by the end of this year, a goal that will require it to significantly ramp up vehicle sales in the fourth quarter.
It said it the capacity installed to produce and deliver 500,000 vehicles this year, but added that achieving its goal has become more difficult.
Tesla does not break out regional sales, but Reuters said data from China’s auto industry association, CPCA, showed Tesla Model 3 sedan sales remained roughly flat from July to September. Overall, Tesla sold around 34,100 Shanghai-made Model 3s in the third quarter.
Tesla said Model 3 production at its Shanghai plant has increased to 250,000 vehicles a year, its targeted production rate.