Tesla Motors Inc (NASDAQ:TSLA) shares have been assigned a Neutral rating by ING Group analysts, who initiated coverage on the stock with a report released to investors on Wednesday. Analysts said the move was a valuation call.
Tesla pros and cons
Also analysts at Zacks assigned a Neutral rating to Tesla, upgrading the stock from Underperform in a research note to investors on Wednesday. They have assigned a $273 per share price target on the stock. Zacks analysts said the increase in the rating is on the back of increasing sales, rapid international expansion, increasing production rate and ongoing investment in infrastructure and product development. Additionally, the construction of the gigafactory will also be a positive in the long term.
On the flip side, factors such as continuing losses, increasing research and development and selling, general and administrative expenses, and production hurdles such as a shortage of batteries will affect the performance of the EV maker. Tesla Motors’ direct selling model has also been questioned and banned in some states.
The company posted an adjusted loss of 14 cents per share in the second quarter of 2014, a decline from the adjusted income of 5 cents posted in the previous year.
“D” effect pushing Tesla up
Over the past week, Tesla shares have risen approximately 6% ahead of today, the date tweeted by CEO Elon Musk, in which he wrote that the company would unveil the “D” and something else.
Shares of the EV manufacturer are riding high at a time when rivals like Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) are struggling due to sluggish sales. It is not clear what Musk will launch in today’s event, but the D could be anything. According to analysts, the D could stand for driverless, or the company could launch an all-wheel drive dual motor version of the Model S.
Most of the rumors are pointing towards a new driverless technology for the Model S. Musk recently said in an interview to CNN’s Rachel Crane that he envisions Tesla becoming 90% autonomous in 2015.
Some are not shying away from suggesting that Tesla might give a first look at the Model 3, the budget car that will sell for $35,000 in 2017. Tesla is promoting its Model 3 as a mass market car, as the price will be half of Model S.