Analyst Thinks Tesla Stock Could Soar 114%
Tesla Motors Inc (NASDAQ:TSLA) is once again having a rough day, as the stock continues its downward journey on the back of more analyst downgrades. But one analyst thinks TSLA stock is worth 114% more than its current value.
Credit Suisse analyst Dan Galves is bullish on Tesla Motors ahead of the company’s fourth-quarter earnings release on Wednesday. Galves is reiterating his “Buy” rating, setting a $325.00 price target, which is more than double its current trading price.
“We remain bullish on TSLA, with high conviction on a 12-month view and also constructive in front of Wednesday’s print,” says Galves. (Source: “Buy Tesla (TSLA) Ahead of Forthcoming Model X Ramp – Credit Suisse,” Street Insider, February 8, 2016.)
The analyst recognizes the shortfall in “Model X” deliveries below market’s expectations but points to a positive signal. He says deliveries for the new model have continued through January and February, which means the company no longer faces any significant production-related issues.
Galves acknowledges the quality issues faced by the company in the early production stage of the Model X, but confirms that the issues seem to have been resolved now.
As Galves informs, “According to the management, the production process is quite dialed-in right now, there are no critical unresolved design issues, and once re-designed parts are available, the ramp should progress quickly. Meanwhile, Model S production continues to run at very high levels.” (Source: Ibid.)
Galves strongly believes the market has oversold Tesla stock on the back of some bad news. Overlooking the negative sentiments surrounding TSLA stock, the analyst reaffirms, “There are understandable reasons why TSLA has sold off recently—risk-off/global macro concerns, negative sentiment on auto stocks, and declining oil prices. But we see the concern on Model X production ramp/volumes, the subject of several recent bearish notes, as overdone at this point.”
Credit Suisse is sticking with the positive outlook for TSLA stock in 2016, while trimming down estimates for 2017.