Tesla Motors Inc (TSLA): Bulls, Bears, And A ‘Deer-Jacked’ Industry

Tesla Motors Inc (TSLA): Bulls, Bears, And A ‘Deer-Jacked’ Industry
Blomst / Pixabay

Tesla Motors Inc (NASDAQ:TSLA) continues to trade above $200 a share, defying logic more and more every quarter. Of course as expected, analysts are just as split on the automaker as ever. Some have upgraded their rating, while others have downgraded it. And they’re all defending their views with various arguments.

Setting bullish views for Tesla

Tesla Motors Inc (NASDAQ:TSLA) beat expectations for earnings per share and guidance, which further set its dominant position in stone for some analysts, like those at Litchfield Hills. Theodore O’Neill reiterated his Buy rating and $222 per share price target for Tesla.

Macro Hedge Funds Earn Huge Profits In Volatile Macro Environment

Yarra Square Investing Greenhaven Road CapitalWith the S&P 500 falling a double-digit percentage in the first half, most equity hedge fund managers struggled to keep their heads above water. The performance of the equity hedge fund sector stands in stark contrast to macro hedge funds, which are enjoying one of the best runs of good performance since the financial crisis. Read More

He thinks it’s interesting that mainstream automakers don’t seem to have a “credible action plan” to fight back against Tesla’s market share gains. He even went so far as to say that Tesla CEO Elon Musk had “deer-jacked” the auto industry. Contrary to the growing pool of analysts who see Tesla’s valuation as ridiculously high, he said in his report that it “still isn’t totally silly,” as the automaker’s forward PE is 35.

The Street Ratings Team has upgraded Tesla Motors Inc (NASDAQ:TSLA) from Sell to Hold, citing a number of strengths, like robust revenue growth, reasonable debt levels, and solid stock performance and financial position. However, the one thing they don’t like is the automaker’s profit margins.

Bears counter on Tesla

On the bearish side, Deutsche Bank analyst Dan Galves and his team have downgraded Tesla Motors Inc (NASDAQ:TSLA) from Buy to Hold. They note that there were some major disclosures on the automaker’s release and conference call, including the ramp-up to 48,000 vehicles produced per year by the fourth quarter of the year and next week’s conference call regarding the gigafatory.

However, the Deutsche Bank team has now joined the growing list of analysts who can’t get past Tesla Motors Inc (NASDAQ:TSLA)’s valuation. Other problems they see include rising operating expenses and uncertainties regarding the gigafactory and the distribution network. They said if Tesla shares should pull back or shares remain range-bound for “an extended period,” they would begin to “get more constructive” on the automaker. In spite of the downgrade, however, they raised their target price to $220 from $200 a share.

JPMorgan analysts reiterated their Neutral rating on Tesla Motors Inc (NASDAQ:TSLA) and also raised their price target. However, they’re far more bearish than Deutsche Bank is, as their price target went from $115 to $137 a share. They note that fourth quarter execution was very strong and that higher average selling prices were the main drivers of the operating profit beat. Like Deutsche Bank, however, they see Tesla’s valuation as being too rich at current levels.

Updated on

No posts to display