UBS sees a 50% upside

Tesla Inc (NASDAQ: TSLA) has been a disappointment for shareholders in 2022, but a UBS analyst says shares are now ripe for a sharp recovery. The stock is down close to 40% year-to-date.

Patrick Hummel upgraded Tesla stock

Patrick Hummel upgraded Tesla to “buy” on Thursday and announced a price target of $1,100 a share, which represents a 50% upside from here. Explaining why, the analyst wrote:

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The operational outlook is stronger than ever before thanks to record-high order backlog, two new giga factories, margin momentum, and a structural competitive edge in key supply chains, resulting in superior growth and profitability.

Hummel agrees the Shanghai lockdown could hit EPS by 12% this year, but raised his earnings estimate for the next three years by up to 40%.

Jim Cramer agrees with the bullish call

In-house cell capacity was among other reasons why the UBS analyst is strongly bullish on Tesla Inc. Agreeing to his call on CNBC’s “Squawk on the Street”, Jim Cramer said:

This piece tells you that Tesla is more liquid, stronger than everybody else, with a better supply chain. Others are still a couple years behind Tesla. Every time Tesla puts out a car, it sells. So, he’s making the call that stock has come down enough.

Also on Thursday, data from the China Passenger Car Association (CPCA) confirmed a strong rebound in Tesla sales. The EV maker sold more than 32 thousand China-made vehicles last month, versus only 1,152 in April.