The recurring buzzword this yr needs to be inflation however presumably in second place you’ll discover the mix of provide and chain.
Many industries have been affected by provide chain bottlenecks, not least the auto business with chip shortages coming to the fore. For the EV section there’s one other ongoing concern; that of the potential for a scarcity of batteries/battery supplies.
That mentioned, Canaccord analyst George Gianarikas thinks Tesla (TSLA) has been ensuring it’s well-equipped to cope with any provide chain points.
“Over the past a number of years, Tesla has labored on securing battery supplies provide by direct partnerships with the producers of lithium, cobalt, and nickel,” the analyst mentioned. “In consequence, Tesla has been in a position to navigate the worldwide, rolling supply-chain disaster higher than its opponents.”
Tesla, subsequently, sits in an “enviable place” and is ready to look on as others within the auto business rush to pay money for sufficient provide of supplies important to EV manufacturing (similar to lithium and uncommon earths).
The EV supplies subject seems to be entrance and heart for business giants similar to Volkswagen, Ford, and GM who’ve “accelerated procurement efforts” though Gianarikas notes that others “seem like much less enthusiastic.”
As supply-chain points concerning supplies thwart OEM electrification targets, Gianarikas thinks there shall be an uptick in mining acquisitions by auto OEMs.
Tesla has one other plan in thoughts. A latest proposal filed with the Texas Comptroller’s Workplace reveals that it intends to develop a lithium hydroxide refining facility within the Lone Star State with “entry to the Gulf Coast delivery channel.” Naturally, Gianarikas likes this concept, noting that as the corporate “deepens” relationships with lithium miners, the pivot towards a NA lithium refining facility is sensible. “We see this strategic step by Tesla as a testomony to its vertical integration, which we view as key to long-term success in future mobility,” the analyst summed up.
All informed, Gianarikas charges TSLA a Purchase, though his $304 value goal suggests shares will stay vary certain for the foreseeable future. (To observe Gianarikas’s monitor document, click on right here)
So, that’s Canaccord’s view, let’s flip our consideration now to remainder of the Road: TSLA’s 19 Buys, 6 Holds and 5 Sells coalesce right into a Average Purchase score. The typical goal is barely a contact larger than Gianarikas’s goal; at $309.38, there’s room for simply 1% upside from present ranges. (See Tesla inventory forecast on TipRanks)
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Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is vitally vital to do your personal evaluation earlier than making any funding.
