Tesla Motors Inc (NASDAQ:TSLA) has been one of the favorite shorts on Wall Street and continues to be—even though the company has returned 76 percent year to day and 57 percent since it pre-announced its first quarter results at the beginning of April.

Jefferies analysts Elaine Kwei and Peter Nesvold predict that short covering will continue pushing the company’s stock price higher, and they’ve raised their price target for the stock.

Tesla Motors

The Story Behind All The Shorts Of Tesla Motors

About 18 months ago, it makes sense that investors expected Tesla Motors Inc (NASDAQ:TSLA) shares to continue falling. Not only were the company’s electric vehicles completely untested in terms of market demand, the company bears some similarities to companies which are failing. For example, it also secured loans from the Department of Energy, just as Fisker Automotive and a number of other failing companies did. However, while Fisker Automotive lays off most of its workforce and struggles against bankruptcy, Tesla Motors said it will repay its loan early.

In the view of Kwei and Nesvold, more pain is ahead for investors who are shorting Tesla Motors. They point out all the positive momentum CEO Elon Musk has generated for the company through his various tweets and constant press releases about what the company is doing. They believe “there’s still a long way to go” because we have yet to see short interest to come down any significant amount.

First Quarter Expectations For Tesla Motors

The analysts believe that when Tesla Motors Inc (NASDAQ:TSLA) announces its first quarter earnings, the focus will be on regulatory credits and new orders. They predict that the results will be in line, although they see potential upsides to the company’s revenue because of its sales of emission credits.

If you remember, in March it was revealed that Tesla Motors brought in about $40 million just by selling off its emission credits. Last year about 10 percent of the company’s revenue was earned just by selling those credits. So the analysts are definitely right that sales of those credits bring an enormous potential for revenue upside.

Tesla Motors Inc (NASDAQ:TSLA) is expected to report 20,000 vehicle deliveries annualized. It launched in Europe and Asia this year.

Tesla Motors Price Target Raised To $68

Kwei and Nesvold have increased their price target from $45 per share to $68 per share and rate shares of Tesla Motors as a buy. They join Barclays Capital analysts, who raised their target to $65 per share, and analysts at Robert W. Baird, who increased their price target to $62 per share.