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Financial services firm UBS has upgraded Tesla’s (TLSA) stock to buy from neutral, with analyst Patrick Hummel noting that he believes the “operational outlook” for TLSA is “stronger than ever.” While Tesla stock has been hovering around $700 for some time now, he upgraded TSLA and set a price target of $1,100 per share. 

Hummel noted that “TSLA is down ~35% YTD in line with other tech stocks” but cited several reasons for the upgrade. These included “record-high order backlog and two new gigafactories ramping up,” “margin momentum,” and “a structural competitive edge in key supply chains, resulting in superior growth and profitability.”

The upgrade comes as Tesla continues to face distractions, including a halt in operations at its Giga Shanghai factory due to COVID-19 and the ever-changing state of affairs with CEO Elon Musk’s potential purchase of Twitter. UBS had previously slashed its 2022 earnings-per-share outlook by 12 percent.

Nevertheless, Hummel stated that he believes Tesla is “best positioned to become one of the top-3 global car makers by 2030,” citing the expectation that “Tesla’s vertical integration in semiconductors, software and battery [will] result in superior absolute growth and profitability in the years ahead.” This includes the process by which Tesla sources essential battery commodities such as lithium. 

In the future, Hummel said Tesla stock could improve more under certain circumstances, including the return to total production for the Shanghai plant, the 2023 launch of the Cybertruck, and a potential “AI day” this Fall in which the company may reveal new details about its fully self-driving technology and a rumored humanoid robot. 

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