Sustainable energy to be a highlight of Tesla investor day, Goldman Sachs expects. The firm reiterated a Buy rating and $200 price goal.
Goldman Sachs released a note to clients ahead of Investor Day, which can be held on March 1 at Giga Texas and streamed online. In the course of the event, Elon Musk will unveil Master Plan 3, and analysts expect the corporate to give attention to the energy segment. Almost definitely, the CEO of the corporate will discuss what the world needs for the transition to sustainable energy. Goldman also expects topics to incorporate full self-driving (FSD) and the Optimus robot, in addition to financial aspects, including EBIT margins/opex leverage, and capital allocation.
In response to analysts, the Optimus robot is not going to be the principal issue for many institutional investors, especially since lots of details about it was received during AI Day in the autumn of 2022. Nevertheless, they are going to still wish to get an informational update.
Goldman analysts wrote in a note, “We expect the transition to sustainable energy and the outlook for Tesla’s Energy segment to be one of the crucial distinguished parts of the event (with Elon Musk stating that he’ll present Master Plan 3 on this topic). Recall that Tesla has said that the TAM for energy could possibly be larger than automotive, and the corporate is within the strategy of ramping a 40 GWh ‘Megafactory’ in Lathrop California (roughly 10X its prior capability) for its utility scale Megapack product. Recall that at Battery Day in 2020, Tesla commented that the world needs roughly 10 terawatt-hours a 12 months of battery production to transition the worldwide fleet to electric vehicles, and 20-25 terawatt-hours per 12 months to transition the world to renewable energy. Tesla recently announced it plans to construct 4680 batteries in Nevada, which can be a step towards that goal.”
Tesla also announced on Wednesday that it should open a part of its North American charging network, for all electric vehicles. This measure has already been applied in Europe and Australia. Analysts see this as a strategic plus that might boost earnings per share.
Goldman believes Tesla can comment on how it should maintain a powerful EBIT margin, but they don’t expect Tesla to offer an official EBIT margin goal. Tesla also said it should discuss capital allocation when it publicizes an investor day, and the firm believes this may include capex and a possible share buyback.
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