Shares of Tesla Inc (NASDAQ:TSLA) continued to climb in early trading on Monday, continuing its uptrend from last week.
China’s demand for electric vehicles (EVs) should be a tailwind in the first quarter, according to Wedbush.
The Analyst: Daniel Ives maintained an Outperform rating, while raising the price target from $200 to $225.
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The Thesis: There has been a “noticeable turnaround” in Chinese demand, which was a headwind for EV markers in the fourth quarter due to lockdowns and macro uncertainties, and this is favoring Tesla to domestic manufacturers, Ives said in a note.
The price cuts have swayed three of every four EV buyers in China based on Wedbush’s survey work in China, Ives explained.
Tesla’s “unmatched ability to scale its production operations in China are meaningful to margin stability which are front and center for the Street,” he added. “The macro remains uncertain and a recession could likely be on the doorstep, however Tesla is now positioned well with its price points with demand outstripping supply so far in 2023.”
TSLA Price Action: Shares of Tesla had risen by 2.22% to $194.26 at the time of publication Monday.