The Wall Street firm upgraded Tesla to Buy and assigned a $1,071 price target, according to the note.
"Tesla is rapidly creating an Apple-esque ecosystem of energy products... to become the brand in energy storage," Dorsheimer said.
The long-term potential of Tesla's budding energy storage business won over a Wall Street analyst on Monday, with Canaccord Genuity upgrading the electric vehicle manufacturer to Buy in a Monday note.
Canaccord analyst Jed Dorsheimer assigned a $1,071 price target to Tesla, representing potential upside of 58% from Friday's close, according to the note.
"Tesla's focus on first-principle engineering we believe will radically change the battery market, enabling the company to further the lead in [battery electric vehicles] and expand into the solar and home energy markets with its Powerwall products," Dorsheimer explained.
Tesla is constrained right now as supply constraints impact its battery production, but those pressures should be alleviated in 2022 as production comes online for Tesla's Giga factories in Nevada, Texas and Berlin, the note said.
"Ample battery supply will allow Tesla to meet its new aggressive Powerwall campaign, as well as Powerpack, and Megapack in full scale, often paired with solar installations," Dorsheimer said.
That should accelerate Tesla's growth in its energy generation and storage business, which could reach $8 billion in annual revenues by 2025 and have better gross margins than its electric vehicle business, according to the note.
Tesla's first mover advantage in battery technology, combined with a branded ecosystem of energy products that is "Apple-esque," means the company can become "The Brand" in energy storage.
"Tesla's successful transition to mass-market EVs and strong investments in battery manufacturing expertise and production capacity give us confidence they will attack and conquer another trillion-dollar market in energy generation and storage," Dorsheimer concluded.
Shares of Tesla jumped as much as 4% in Monday trades.
