What happened
Topsy-turvy Tesla (TSLA 12.06%) stock -- which spent most of last week on a downswing -- suffered another sell-off early Monday morning, falling by nearly 5%. But by 10 a.m., it seemed that the market's view was moderating, and the stock bounced. It was still in the red as of 11:40 a.m., but only by about 0.4%.
So what good news helped Tesla cut its losses Monday?
Image source: Getty Images.
So what
Take your pick -- because as it turns out, this is looking like a pretty good news day for Tesla. In fact, if it weren't for the Nasdaq as a whole being down by 1.9% at the same point Monday morning, I kind of think Tesla would be in the green!
At least three analysts were singing Tesla's praises, you see.
First, Wedbush just reiterated its outperform rating on the stock, reports StreetInsider.com, and with a $1,400 price target that implies nearly 40% upside in the stock this year.
Tesla's launch of Model Y production at its new factory in Austin, Texas, sets the company up "to have a massive year in 2022," reports Wedbush. The new production facility will become "the centerpiece of Tesla's broader supply ambitions as well as its formal HQ buildout," and could help double the company's capacity to 2 million vehicles per year.
At Global Equities Research, the view is similarly upbeat, with analysts saying Tesla is heading into 2022 looking "extremely strong," and "even more stronger than what we saw on December 28, 2021." ("Even more stronger?" I have to say -- that sounds pretty strong.)
Now what
Rounding out the list of Tesla fans Monday is Goldman Sachs. While not quite as optimistic as Wedbush, Goldman does expect Tesla stock to gain about 20% this year, based on its $1,200 price target.
"Given its leadership position in EVs ... and its focus on clean transportation more broadly (given its solar and storage businesses)," Goldman asserted Monday in a note covered on TheFly.com that Tesla is "best positioned to capitalize on the long-term shift to EVs" worldwide. As the company grows in size -- and remember here Wedbush's comment on production capacity doubling -- Goldman anticipates that Tesla will reap economies of scale sufficient to expand its profit margin.
Granted, I don't know that Tesla will be able to expand its profit margins enough to totally justify its staggering 330 price-to-earnings ratio. But when you consider that at a net profit margin of 7.4%, Tesla is already more than three times more profitable per dollar of revenue than Ford Motor Company (F 0.08%) with its 2.1% net profit margin, a further expansion of profit margins still bodes pretty well for its future.
