Tesla Motors Inc (NASDAQ:TSLA) stock are expected to rise further, expects Adam Jonas of Morgan Stanley. “We think the stock’s worth $109 on a 15-year DCF,” he said, or “discounted cash flow.”
The tax credits earned by the electric car company were “equal to a large percentages” of spending on Capex and R&D by the company, on the basis of which analysts feels the inherent risk is much less. This will help the stock to rise higher, though the pace may not be similar to one experiencing now.
Volatility In Tesla Motors
Also, the analyst feels that the volatility in Tesla Motors Inc (NASDAQ:TSLA)’s stock is not concerning. Jonas says “Volatility works both ways”, so to maintain a balance in the stock market sell is as important as a buy. This also helps to gain more investors every time a stock dips.
Analysts tells that presently there is a lot of heated trading activity going on, so from the trading point of view, it will be nice to see the things settle down. But still, Tesla is expected to hit $109 and on a risk-adjusted return, analysts expect a possible favorable upside “compared to the average auto stock we cover.”
Adam Jonas told on CNBC’s “Fast Money” that the auto industry is facing some tough time presently owing to the weakening of Japanese yen, decline in North American capacity and pricing for used vehicles.
The stocks that should be avoided in the auto sector, as per Jonas are Goodyear, Harman, Tenneco, Hertz and Avis.
Other related info
As per the documents filed with the SEC on May 31, Co-Founder and CEO of Tesla Motors Inc (NASDAQ:TSLA), Elon Musk purchased 1,084,129 shares of company stock for $100,000,056.
Year to date, Tesla Motors Inc (NASDAQ:TSLA)’s stock price are up 170.53 percent with a peak of $114.90 on May 29. Despite the impressive performance, around 31.5 percent of the shares have been sold short. Overall, the analysts are bullish on the stock with eight “buys” or better, versus three “holds” or worse. However, the stock has a consensus 12-month price target of $74.30, which is significantly lower that the current price.
Tesla Motors Inc (NASDAQ:TSLA) will be holding its annual shareholder meeting today, an announcement regarding target revisions or any other significant development could push the stock further.