Tesla wows Deutsche Bank in Giga Texas tour, analysts are ‘all in’

June 1, 2023

In a meeting with Deutsche Bank analysts, Tesla revealed a massive amount of information, which resulted in the analysts maintaining their high price target and buy rating.

While incredibly entertaining, Tesla’s shareholder meeting earlier this week did not reveal all of the information that many fans and analysts were looking for. Nonetheless, with the message supplied, Tesla stock rallied following the announcements. Now, a new report from Deutsche Bank analysts gives fans and investors more good reasons to be optimistic.

According to a new report from Investing.com, Tesla executives met with analysts from Deutsche Bank following the Shareholder Meeting earlier this week. During the meeting, analysts were given a tour of Giga Texas and a deeper look at Tesla’s plans. From their discussion, Deutsche Bank has decided to maintain its $200 price target and buy rating for the Tesla stock.

“All in,” the Deutsche Bank report began. “We came away encouraged that Tesla could deliver cost improvements and efficiencies in the quarter ahead, which may help offset some of the pressures, but we still worry the company may have to take additional price cuts in a weakening environment, which could put further pressure on earnings.”

Most notably, according to the notes from Deutsche Bank analysts, Tesla executives revealed that the company has been considering advertising for months but were prompted to act after seeing the enthusiasm from the group of Tesla investors. Tesla believes that, besides attracting new customers to the brand, its marketing could also help address buyers’ misconceptions regarding battery life/range, charging and charging availability, and the general durability of electric vehicles.

Other points from the meeting, while less revealing, should also provide good insight to investors. Deutsche Bank analysts specifically noted that manufacturing improvements at Giga Texas would likely help Tesla maintain high profitability, despite the economic headwinds that Elon Musk pointed out during the Shareholder Meeting. Moreover, the analysts were incredibly impressed by the progress on tooling for the upcoming Cybertruck, which will be revealed fully in Q3 of this year.

Specifically, analysts stated that Giga Texas was “well designed and runs very efficiently, and is clearly making good progress in ramping up both vehicles and battery cells volumes, and in installing tooling for Cybertruck.”

The final notes from the Deutsche Bank investors were regarding Tesla’s financials and how they will likely change in the coming months and years. The analysts, agreeing with Elon Musk, believe that economic headwinds and a slight lull in EV demand may force the brand to cut prices further. Still, margins should be maintained thanks to a combination of falling material costs, dropping manufacturing costs, and a growing number of offerings. This makes Tesla reasonably unique within the automotive segment, which has seen shrinking profitability following the first quarter of the year.

“Mid-term,” the Deutsche Bank analysts conclude, “Tesla confirmed that it is working on developing two new models on its next-gen platform and represent its highest priority at present. We are also encouraged by the targeted combined unit volume of 5 million, and we remain bullish on the opportunity presented within the next-gen platform.”

Tesla stock finished the week up nearly 7%.

William is a Tesla shareholder but does not have funds managed by Deutsche Bank.

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Tesla wows Deutsche Bank in Giga Texas tour, analysts are ‘all in’