Tesla, Inc. (NASDAQ:TSLA) shares have shed more than 30% in the year-to-date period amid worries concerning the COVID-19 lockdowns in China and worsening macroeconomic fundamentals.

The Tesla Analyst: UBS analyst Patrick Hummel has upgraded Tesla shares from Neutral to Buy and maintained the price target at $1,100.

The Tesla Thesis: Tesla boasts of a record-high order backlog and it also benefits from the ramp-up of two new gigafactories, analyst Hummel said in a note.

The company is seeing margin momentum, the analyst said. After dipping in the second quarter, auto gross margin should structurally exceed 30%, thanks to pricing & process innovation, he added.

Tesla, the analyst noted, has a structural competitive edge in key supply chains, which would lead to superior growth and profitability.

"Integration represents a strong competitive edge in an environment of structurally tight supply chains," Hummel said.

Related Link: Tesla Bounces Back With Strong May Sales In China, Clocking 2000% Sequential Rise

The operational outlook, the analyst said, is stronger than ever before.

Hummel lowered his 2022 earnings per share estimate for Tesla by 12% to account for the Shanghai lockdown. The 50% growth target will still be met, he said.

UBS, however, raised its EPS estimates for the next three years by up to 40%, resulting in 2025 EPS of $28. This, according to the firm, can be achieved mostly with the already-know products and production facilities.

Tesla Price Action: Tesla stock closed Thursday's session down 0.89% at $719.12, according to Benzinga Pro data.