TD Cowen Reiterates Buy on Tesla, $388 Price Target

TD Cowen analyst Itay Michaeli reiterated a Buy rating and $388 price target on Tesla (NASDAQ: TSLA).

“Recent concerns over a growing political divide around Tesla’s brand are legitimate, adding further risk to NT demand.

But what such concerns seemingly overlook is that under scenarios whereby Tesla were to lose share in Blue counties but gain in Red, Tesla could actually net meaningful sales gains over time.

Competing EVs could benefit too (GM most). We deep-dive US county data in this report.

Brand Destruction or Reconstruction? Interestingly, in 2 out of 3 modeling scenarios, Tesla’s PF US sales actually increase, mostly because of significant EV under-penetration in Red counties.

Our base scenario sees Tesla gain >100k units long-term. Our aggressive & conservative scenarios see Tesla gain 490k and lose 11-37k units, respectively.

To be sure, if this were to play out, headwinds would likely materialize before tailwinds, so this isn’t a call on NT demand (expect a tough Q1).

Rather, our analysis suggests that over a multi-year period, Tesla’s growth in under-penetrated EV regions could overcome losses in current strongholds.

We maintain our tactical Buy on Tesla on post-Q1 catalysts.”

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