Tesla is a beaten-down stock worth buying now following price cuts, according to Berenberg. Analyst Adrian Yanoshik upgraded the stock to buy from hold. Yanoshik lowered his price target by $55 to $200, which still implies a 12.4% upside from where the stock closed Friday. He lowered his earnings estimate by around 25% for 2023 following price cuts for its electric vehicles. “We believe that Tesla’s price cuts reflect its cost leadership strategy,” Yanoshik said in a note to clients. But he said those cuts could also be a blip as margins recover with product shifting away from its Fremont, California, plant, which has higher labor costs, old equipment and an inefficient design. That’s part of a multi-year opportunity Yanoshik sees for improving efficiency in capital and labor. Yanoshik said battery cell production is another opportunity for the company to scale, although he noted challenges remain. He also said the company is pricing to “drive volumes” in homes of keeping itself competitive with new electric vehicle launches and could see market share at a gross margin of more than 25%. Expecting single-digit price cuts for the Model 3/Y for 2023 and a smaller cut for the Model S/X, Yanoshik lowered his gross margin estimate but raised his volume estimate by 2% for 35% year-over-year growth. A higher proportion of production from new, more efficient plans including Shanghai, Berlin and Austin will help offset margins, he said. Looking ahead, he said the company has guided for a strong outlook, with strong order intake expected following the price cuts. Yanoshik said the valuation is also more attractive when looking ahead of 2025. While the shares have been rallying this year, the stock is still in the red the last three months by a little more than 20% after disruptions in China and CEO Elon Musk’s chaotic takeover of Twitter. That decline makes the shares attractive, the analyst said. — CNBC’s Michael Bloom contributed to this report.