Tesla stock was up yesterday after Oppenheimer initiated coverage on the auto firm with an Outperform rating and a target price of $340. Analysts Colin Rusch and Noah Kaye cited the Model X launch and the shipping of Tesla Energy products in Q4 as positives for the firm.
Analysts bullish on Tesla
Investors are still concerned about the company’s prospects despite an impressive performance from the firm so far. Though the company’s stationary power and automobile offerings are a good fit for a well-documented market, Tesla’s potential business models and future target markets for the products look tough for “investors to wrap their heads around,” analysts believe.
Oppenheimer’s analysts think Tesla has immense potential to leverage autonomous technology in the logistics and media space. So the EV firm is seen to be positioned well owing to its design expertise, hardware solution, sound infrastructure and growing network of super-charging stations.
“We view Tesla as a transformative battery-powered product company with leading expertise in cell design, packaging, associated software, human-machine and machine-machine interaction design,” analysts wrote.
Should investors be concerned about product delays?
On whether investors should be concerned with product delays, the analysts note that the company’s product launch guidance helps in tracking its progress. However, many investors and analysts who are bullish on the stock are not concerned about the product delays, but they do fear that Tesla will not be able to deliver the features that it promises. On this, Oppenheimer analysts say the firm will continue to offer high-quality products that meet expectations.
Citing the example of the Model X, which was expected to debut last year, the analysts say that Tesla delayed the vehicle to put in unique features that have not be seen in other cars yet. This, according to analysts, is a good enough reason to push customers’ enthusiasm and Tesla’s brand value. The first orders of Tesla’s Model X are scheduled for delivery later this month.
Stifel analysts also reaffirmed their Buy on the stock on Wednesday. Of the 22 analysts covering Tesla, ten rate it a Buy, seven see it as a hold, and five consider it a Sell. Presently, the average price target on the stock is $305.
On Wednesday, Tesla stock closed up 0.3% at $248.91. Year to date, the stock is up by over 12% while, in the last year, shares are down by over 10%.