Barclays initiated coverage of Tesla shares with an overweight rating after the bell on Tuesday, saying shares of Elon Musk's electric vehicle maker should rebound this year because of its relative financial strength and lead in software. "We believe that Tesla's clear lead in both the global EV transition and the emergence of the software defined vehicle, as well as positive trajectory on volume, should lead to outperformance for the stock," wrote analyst Dan Levy. Levy's 12-month price target is $275, representing a 31% increase from Tesla's closing price Tuesday. Tesla shares lost 65% of their value in 2022, but have been on a tear this year. The shares have rebounded nearly 70% in 2023 and have doubled off their 52-week low. To be sure, the stock is still down 28% over the last 12 months. "We believe Tesla remains the clear leader in the race to EV transition – reinforced by the market amid the sharp recovery recently seen by TSLA," wrote Levy. "With a margin edge and unhampered by the constraints facing legacy automakers, we expect TSLA volumes to grow a robust 20% [compound annual growth rate] through the end of the decade." TSLA 1Y mountain Tesla 1-year Levy launched coverage on the U.S. auto and mobility industry and holds a neutral view of the space overall, citing recession pressures. Barclays likes five other stocks as buys in the space: Rivian , Adient , Borgwarner , Mobileye and Aptiv . —With reporting by Michael Bloom.
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