Tesla | Fundamental Analysis | NEXT TARGET | MUST READ ! ! !

Tesla stock held a stock split last week, and trading adjusted for the split began on August 25th. As of this writing, the stock is trading below $300. But one analyst thinks the stock could soar to $360 over the next 12 months. The price target, reflecting this optimism, represents more than 20 percent upside potential.

A key theme of this optimism is Tesla's improved production capacity. In this regard, the Wedbush analyst believes that annual shipments could rise sharply next year, rising from less than one million in 2021 to about two million in 2023.

While such staggering growth may seem unrealistic at first glance, Dan Ives' prediction that Tesla will deliver two million cars in 2022 is actually quite conservative upon closer examination.

Ives raised his 12-month Wedbush price target for Tesla stock from $333 to $360 on a split-adjusted basis, citing Tesla's improved production performance at its high-performance plant in China and the company's overall momentum toward year-end.

Earlier this year, Tesla's plant in China suffered a major setback when the Shanghai government restricted plant operations as part of an effort to slow the spread of COVID-19. But the automaker said in its second-quarter update that production numbers at the important plant not only recovered but rose to record levels by the end of the period.

When investors consider this momentum, along with Tesla's reports of continued improvement at its California plant and production ramping up at new plants in Texas and Berlin, two million deliveries in 2023 begin to look achievable. After all, Tesla plants are already equipped to produce more than 1.9 million units a year. And Tesla executives have not said they intend to slow down investment in capacity expansion.

What's more, company executives have said they expect full utilization of existing production capacity by the end of the year. Indeed, Tesla CEO Elon Musk said during his second-quarter earnings report that the company has "a good chance of reaching production levels of 40,000 cars per week this year. This, of course, means annual production of more than two million units a year.

While delivering two million cars next year would be an amazing achievement for Tesla, it represents only part of the company's vision. At Tesla's annual shareholder meeting, Musk said that the company eventually hopes to build 10 to 12 plants, with the new plants producing between 1.5 and two million vehicles per year en masse. According to Musk, another plant location will be announced later this year.

Of course, Tesla's growth expectations come with certain risks. First of all, there is the risk that management's view of the company's growth potential is too optimistic. The second major risk that has recently attracted more investor attention is the risk associated with the global supply chain needed to support the growing production of complex products such as electric cars. Recent macro and geopolitical events have shown that global supply chains are often more fragile than investors realize.

But even despite recent problems, Tesla is apparently performing extremely well - and a record second half of the year and a solid start to 2023 seems almost certain at this point (assuming no major unexpected headwinds occur).