Tesla Motors Inc (NASDAQ:TSLA) managed to regained some of its stock value after plummeting by nearly 14% on Tuesday. The cause of the decline was the bearish report released by Goldman Sachs analyst Patrick Archambault.
The stock price of the electric car manufacturer rose by almost 11% to $120.25 per share during the afternoon on Wednesday in New York. Tesla Motors Inc (NASDAQ:TSLA) benefited from the positive report released by Andrea James, analyst at Dougherty & Co.
Tesla Price Targets Vary From $58 to $200
James significantly raised her price target for shares of Tesla Motors Inc (NASDAQ:TSLA) from $90 to $200 per share.
In a note to investors, James said, “We ultimately believe Tesla is a $300 stock at the factory’s maximum capacity, which we hair cut to $200 for the execution risk.” The analysts also pointed out that Tesla Motors Inc (NASDAQ:TSLA) is the only company to demonstrate that electric car technology actually works.
In contrast, Goldman Sachs Group Inc (NYSE:GS) analyst Archambault believed that the electric car manufacturer is at risk with “sustainability of demand longer-term.” In a worst case scenario, he said the stock price of Tesla Motors Inc (NASDAQ:TSLA) would be around $58 to $113 per share, and the company could sell approximately 105,000 vehicles with 14.5% operating margin if consumer’s sentiment on its vehicles weaken this year. He also pointed out that stock prices of automakers generally decline when interest rates increases, which is possible if the Federal Reserve eventually reduces its bond-buying initiatives.
Tesla's Big Challenge Is Battery Production
Elon Musk, chief executive officer of Tesla Motors Inc (NASDAQ:TSLA) previously acknowledged that one of the major challenges confronting the company is the production of lithium-ion cell. According to Musk, the company is working closely with Panasonic to increase the production of its battery packs to resolve the issue.
“We’re working with Panasonic to ramp up production. We need a lot of battery. The sheer number of battery plants that needs to get built is quite staggering,” said Musk. He projected that Tesla Motors Inc (NASDAQ:TSLA) will be able to ship 800 cars per week by the end of 2014.
Meanwhile, Bloomberg reported that Tesla Motors Inc (NASDAQ:TSLA) filed a lawsuit against Atlas Technologies regarding a dispute over an agreement that needs to be heard by an arbitrator. The company filed its case in the Chancery Court of Delaware.