Investment bank Goldman Sachs (GS) has raised its price target on Tesla (TSLA) stock to $1,200.00 and maintained its “buy” rating on the electric vehicle maker.
Goldman Sachs price target on Tesla shares is 17% higher than the stock’s closing price of $1,026.00 last Friday (January 7). Tesla stock is 1.2% lower in today’s premarket.
“We believe that Tesla, given its leadership position in electric vehicles (EVs), and its focus on clean transportation more broadly, will be best positioned to capitalize on the long-term shift to EVs,” Goldman Sachs wrote in a note to clients.
Vehicle demand should remain robust in 2022 relative to supply, allowing original equipment manufacturers like Tesla to maintain strong pricing, according to Goldman Sachs.
However, the firm expects pricing to moderate over the course of the year, which could in turn flatten margins.
Tesla should expand margins soon as it ramps up its Model Y fully electric vehicle and its new factories in Germany and Texas, according to Goldman Sachs. Growing software revenues should also lead to margin growth, the investment firm said.
Tesla shares rallied 50% in 2021 but are down 2.8% so far this year.
Goldman Sachs also named General Motors (GM) a top pick for 2022 for its leadership in the autonomous driving space. Goldman has a “buy” rating on GM and a $72 price target, which is 16% higher than last Friday’s close.
GM’s share price rose 40% in 2021. Its shares were down 0.7% in premarket trading today.
