Matt Debord/Business Insider
- Tesla stock could rally another 8% from its current levels, according to Wedbush.
- That's because EV price cuts "have paid major dividends for [Elon] Musk and co.," tech analyst Dan Ives said.
- Tesla reported record quarterly vehicle deliveries on Sunday, receiving a mixed response from Wall Street.
Tesla's stock has rallied an eye-popping 58% so far in 2023, and it could power even higher as price cuts unveiled by the electric-vehicle maker help boost sales, according to Wedbush Securities.
The company said Sunday that it delivered a record 422,875 vehicles last quarter, up 36% from a year earlier. That is a clear sign that the recently reduced prices on its Model Y and Model 3 cars are already proving attractive to customers, according to Wedbush managing director Dan Ives.
"The Model Y/3 price cuts implemented early in 2023 have paid major dividends for [CEO Elon] Musk and co. as demand appears very solid despite an uncertain macro," he wrote in a research note published Sunday.
Ives is maintaining a $225 price target for Tesla shares, which would represent a 15% gain from the $195 level at last check on Monday.
The EV maker's all-time first-quarter deliveries narrowly beat the 421,164 figure estimated by analysts in a Bloomberg survey, but fell short of the 432,000 forecast by data provider FactSet – and Wall Street delivered a negative verdict on the figure, with Tesla shares falling over 6% in morning trading.
The EV maker's stock has still jumped 58% year-to-date despite those losses, making it one of the best-performing companies on the tech-heavy Nasdaq Composite index.
There are some signs that demand for Tesla's vehicles has increased thanks to the price cuts it announced in China late last year and in the US in mid-January.
Wedbush's Ives said that a revival of demand in China had likely been key to Tesla delivering a record number of vehicles – but added that there could be another test for the EV maker on the horizon, with it set to release its first-quarter earnings report on April 19.
"Overall, while we will get more details on April 19 when Tesla reports its first-quarter results and guidance, this delivery number was a clear step in the right direction and is a positive for the bulls digesting these deliveries," he wrote. "We maintain our outperform rating and $225 price target."