Tesla (NASDAQ: TSLA) has received a number of increased price targets from Wall Street firms this morning. The price target increases were both based on the options that could come from Tesla’s upcoming battery day event, where the electric carmaker will detail its cell production strategy. One company stated that the battery day could be “Masterplan part 3.”
Deutsche Bank analyst Emmanuel Rosner. Rosner increased its prospects for the electric carmaker’s inventory by 33% from $ 300 to $ 400.
Rosner said Tesla has the potential to unveil “a new insourced production system” aimed at increasing battery capacity. In addition, a new cell chemistry that improves the performance and life of the company̵
Battery Day could also see Tesla introduce a system where the cost of cells would be “rapidly declining” thanks to an increased and more efficient production method. “While media and investors’ expectations of the event are high, we believe these announcements can accommodate many of them and strengthen Tesla’s position as a technology leader,” Rosner’s note told investors.
Sustained loyalty and support are also the driving force behind Tesla’s market value, Rosner believes. “We believe that the investor’s continued enthusiasm for EV games and the expected confirmation of ongoing technology, led by Tesla, can continue to support its high valuation.”
Tesla received another increased price target from Credit Suisse, which was also based on the potential development from Battery Day. Analysts from the firm stated that the event would effectively be “Masterplan Part 3”, making Tesla’s industry leader even more important.
Credit Suisse states that Tesla’s long-term battery capacity of two TWh, which is more than thirty times its current capacity, could lead to growth in the automotive and stationary energy storage sectors. It could also see Tesla become a mainstream supplier to other automakers in the future.
In the automotive sector, the increase in cell capacity can help the electric carmaker produce 20 million vehicles a year. This would make Tesla the world’s largest automaker over Toyota, producing 10 million cars annually. The increase in the production of its cars would also be 40 times what Tesla currently produces, which is about half a million vehicles every 12 months.
Tesla shares have regained much of what they lost last week when the company experienced a severe withdrawal due to a large-scale sale of tech shares. Tesla lost 21% of its value last Tuesday, which was the worst trading day in its history. The last week, however, has been good for Tesla as shares have traded at around $ 453 during the early hours of Wednesday’s session, a rise of $ 120 from the low point last Tuesday.
Battery Day takes place on Tuesday, September 22nd.
Disclaimer: Joey Klender is a TSLA shareholder.
H / h: MarketWatch and SeekingAlpha