Tesla Stock (NASDAQ: TSLA)
The firm reiterated its overweight rating for the stock on Tuesday, with a price target of $1,200 — a 69 percent increase from Tesla’s closing price of $709.67 on Monday.
“Bottom line: we continue to like this stock,” analysts Alexander Potter and Winnie Dong wrote in a note. “Tesla remains the driving force behind increased [battery electric vehicle] penetration worldwide.”
Last week, the company reported quarterly earnings that exceeded Wall Street expectations on both the top and bottom lines.
“There was nothing fishy about the 2Q beat; margins were truly that high,” the note stated.
Piper Sandler emphasized Tesla’s prospects in the self-driving business.
“Tesla expects to earn $1.3 billion in self-driving software revenue over the next 12 months.” If this is correct (a big if), the automotive gross margin in 2022 could exceed the mid-20s.”
While Piper expects Tesla’s market share in the electric vehicle space to decline, the company believes Tesla will become an even bigger player in the auto industry overall.
“It is important to note that Tesla’s market share in the battery electric vehicle (BEV) market will almost certainly decline — because many competitors have yet to begin selling BEVs. “However, we fully expect Tesla’s market share to continue rising, and we emphasize that declining BEV market share should not be interpreted as a bearish signal,” the analysts wrote.
Tesla’s stock has been on a tear recently, rising 10% in the last week compared to a 0.3 percent drop in the S&P 500.
However, Tesla shares have underperformed the broader market this year, rising only 0.7 percent in 2021 after a 740 percent surge in 2020.
Victoria’s Secret Stock
Morgan Stanley analysts led by Kimberly Greenberger initiated coverage of Victoria’s Secret at overweight, describing the company as “one of the most appealing names in the specialty retail space.”
“We see VSCO as a credible turnaround story with mid-single digit long-term (L-T) topline growth and mid-teens+ EBIT margin potential,” according to the note.
The retailer is known for its “Angels” fashion show, male-focused lingerie marketing, and lack of body inclusivity. Executives at Victoria’s Secret have pledged to refocus the brand on women’s empowerment.
When-issued trading for Victoria’s Secret stock started on July 21 and ended on Monday. Tuesday will be the first day of regular trading for the stock.
L Brands changed its name to Bath & Body Works on Monday and will begin trading under the new symbol BBWI on Tuesday.
Analysts at Morgan Stanley identified a number of challenges for the retailer.
“Our view is supported by underlying industry growth trends, a global market share gain opportunity, international expansion, nascent category growth, 2020′s meaningful cost rationalization initiatives, recent financial performance, and confidence in new management,” the note said.
However, the company stated that it may take longer for Victoria’s Secret to recover from its troubled past.
′′[When] compared to specialty retail peers and given the challenging 2018-19 performance, VSCO has a longer revenue recovery tail post-Covid-19 as well as higher EBIT margin trajectory potential,” the note stated.
Morgan Stanley has set a 12-month price target of $76 on the stock, which is 65% higher than its current price of $45.99.
The Senate finalized the text of an infrastructure bill on Sunday, allocating $550 billion in new funding over five years for projects such as roads, bridges, public transportation, broadband, rail, water, and airports.
In response to the news, the iShares U.S. infrastructure ETF, a broader way to play the trend, edged higher on Monday.
iShares U.S. infrastructure ETF members and identified the shares with at least a 20% upside implied by the stock’s average 12-month price target. We selected names from that pool that have at least 70% of analysts recommending a buy, with a minimum of four analysts covering the stock.
Take a look at the names in our screen, which was generated using FactSet data.
Steel Dynamics was named a top pick in the North American steel sector by JPMorgan in June. Analysts on average believe the stock will rise 24.1 percent in the next 12 months.
“We believe STLD is one of the highest quality mini-mill steel producers in the United States, and the timing of the company’s Texas steel mill, which has among the most advanced capabilities in the world for a [electric arc furnace], could not be more ideal,” said Michael Glick of JPMorgan.
Quanta Services was named a top construction and energy pick by Credit Suisse. Seventy-six percent of the 15 Wall Street analysts who cover the stock advise investors to buy it.
“As it stands today, the [Quanta] portfolio is very well-positioned to benefit from higher spend in new infrastructure verticals such as utility grid modernization, power grid hardening, renewables integration, electrification/electric vehicles, and telecom/5G,” Credit Suisse’s Jamie Cook wrote in a June note.
Sunnova Energy was first covered by RBC Capital Markets in July, with an outperform rating. According to Wall Street’s average price target, the stock is expected to rise 41.7 percent in the next 12 months.
“NOVA is a leader in the growing US residential rooftop solar market, with a 4-5 percent share based on our estimates, but is capturing a larger portion of the market’s growth,” said Elvira Scotto of RBC Capital.