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Piper Sandler analyst Alex Potter has issued an updated note on Tesla stock, increasing the firm's price target to the highest on Wall Street.

We are reiterating our Overweight rating and boosting our price target from $1,200 to $1,300, following Tesla's breakout Q3 results. Rather than re-hashing the quarter, or "piling on" to the bullishness following a big order from Hertz, we prefer to focus on three other insights that we think are getting overlooked.

Potter continues on to highlight three main takeaways:

  1. "Tesla Killer" EV launches from other brands have generally fallen flat.
  2. Tesla's recent warranty performance has been strikingly good.
  3. Deferred revenue could help offset margin weakness.

Potter notes that despite many new EVs having been on the market for months now, none have been able to match Tesla's post-launch performance. He believes that improving warranty performance is attributable to higher vehicle quality, and notes that deferred Full-Self Driving revenue recognition could ease temporary margin reduction as Giga Texas and Giga Berlin ramp over the next few quarters.

As for changes to the price target, Potter explains:

We now expect Tesla's sales volume to max out around 11.5M units in 2030, which likely implies a #1 ranking in terms of worldwide market share. We also nudged our gross margin expectation higher, citing recent strength. We note that several potential upside levers are still excluded from our forecast, including revenue related to insurance, HVAC, "A.I.-as-a-service", and software in the Energy segment.

Piper Sander's new street-high price target slightly edges out a recently-increased $1,298 per share target from New Street Research.


Disclosure: Rob Maurer is long TSLA stock and derivatives.