Tesla rose as much as 10.7% during the session, driven by Credit Suisse’s upgrade of the stock’s rating to “outperform” and a rebound in the broader market. Tesla has fallen about 20% in January.
Tesla shares have been under pressure since CEO Elon Musk claimed on a recent earnings call with analysts that the company would not launch a new model this year. He said the company’s focus will be on expanding production at existing and new factories, developing humanoid robots and driverless technology.
Credit Suisse says now is the time to buy Tesla, with a price target of $1,025. Analyst, Dan Levy said in an investment report Monday, “Tesla’s profit margins unexpectedly rose, mainly due to cost-cutting. We believe its high margins are sustainable. For the foreseeable future, Tesla will maintain its lead in electric vehicles.”
The report also states, “ Tesla profits to date have come mainly from hardware sales, with a certain contribution from software, especially the full self-driving feature. As Tesla releases more full self-driving features, ‘unlocking’ more deferred revenue, Profit margins will also increase substantially.