Re <<high>>
The squid doing the squid thing again
(1) GS : Amazon target price $4200 ( yesterday $3200 )
Andy Jassy, CEO Amazon Web Services (AWS), hosted the opening keynote of the annual AWS re:Invent Conference highlighting its innovations across compute, data stores, and machine learning. Mr. Jassy was joined by leaders fromJPMorgan Chase, Carrier, and Boom Supersonic who spoke to the pace of innovation gains and cost efficiencies AWS delivers. With tens of thousands of developers, customers, and partners (65k live in 2019) participating annually, we believe re:Invent continues to highlight the significant lead AWS’s ecosystem has over its competitors. We expect continued growth momentum and share gains for AWS as its product offerings expand, pricing flexibility increases, availability grows, and enterprises continue to shift workloads to the cloud and move up the stack. We remain Buy-rated (on CL) with a 12-month price target of $4,200.
(2) GS : raising Tesla target price to $780/share
We are upgrading Tesla (TSLA) to Buy from Neutral and raising our 12-month price target to $780 from $455 given that:
We believe that the shift toward battery electric vehicle (EV) adoption is accelerating and will occur faster than our prior view.We believe that battery prices are falling faster than we previously expected which improves the economics of EV ownership, and there has recently been an increase in regulatory proposals from some jurisdictions to limit or ban the sale of new internal combustion engine (ICE) vehicles entirely in 10-20 years. As a result, in conjunction with our global colleagues, we are raising our outlook for EV adoption and now expect EVs to comprise 18% of sales globally in 2030 and 29% in 2035 (with 50% adoption in 2035 in both the US and in Western Europe). We also believe that the momentum behind EVs from both an economic and regulatory perspective is leading to a higher probability of our upside-case EV adoption scenario that calls for 26% global EV adoption in 2030 and 40% in 2035 (with 66% in the USA and 60% in Western Europe). We discuss the new EV forecast in more depth in this report, and also in a report with our global team — Electric Vehicles: What’s Next IV: ICE share to drop to <25% in 2035; raising EV estimates for US, China, Japan.
Importantly, we expect that Tesla’s integrated model (including its coupling of custom hardware and software, platform approach with significant parts overlap between key products like the Model 3 and Y, and its ability to offer a full ecosystem of products for consumers including solar, storage, and convenient access to fast charging) will help it to sustain a leadership position in the EV market.
If Tesla sustains its mid to high 20% range share of the EV market,then it could reach 15 mn units by 2040 (and about 20 mn under our upside-case EV market adoption scenario). To the extent that the industry continues to shift toward EVs more quickly than we anticipate, or if Tesla is able to take share in the market, then we believe that there is a possibility Tesla reaches these types of volumes more quickly. Our DCF valuation assumes about 15 mn units in 2040 when we have Tesla entering perpetuity growth of 2.5%. |
