By Carly Forster
Slowly but surely, electric powered cars are becoming more and more popular.
Tesla in the News
Tesla Motors Inc (NASDAQ:TSLA) is an American automobile company that designs, manufactures, and sells electric powered cars. On Thursday, June 12, the company announced that they plan to reveal their entire patent portfolio in order to encourage other auto-makers to veer away from gasoline burning vehicles.
CEO Elon Musk explained, “If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal.” This decision can lead to further collaborations with Tesla, who are already making electric systems for Daimler and Toyota.
A Financial Expert’s Opinion
On June 13, Deutsche Bank analyst Rod Lache maintained a HOLD rating on Tesla Motors Inc (NASDAQ:TSLA) with a price target of $220. He explained, “Overall our takeaways were positive with regard to near-term demand and the company’s long-term cost objectives. We noted a high level of investor interest, and active investor participation in the larger group meetings. Although we remain optimistic on Tesla’s prospects, we maintain Hold on valuation.” Since Lache’s recommendation, Tesla shares have remained the same at $206.42.
Lache has a history of recommending stocks in the automotive industry, such as General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F). His recommendations have helped him earn a +17.9% average return on all stocks and a 73% success rate.
On April 11 of this year, Lache maintained a BUY rating for General Motors, but lowered his price target for $48 to $41. He reasoned, “Looking forward, GM’s product cadence is likely to moderate, and GM faces a number of new challenges. So we are adjusting our assumptions to incorporate what we believe to be very conservative assumptions.” Since then, General Motors stock price has gone up from $31.66 to $35.63, helping Lache earn a +2.4% average return and a 50% success rate in recommending the stock.
In addition to his recommendation of General Motors, on April 11 of this year Lache also upgraded his rating for Ford from HOLD to BUY with a $19 price target. He noted that he sees Ford’s new F150 as “significantly more cost competitive” than his previous assumptions and therefore, he is “increasingly confident that Ford is heading for a significant earnings inflection in 2015-2016.” Since then, the cost of Ford shares have gone up from $15.50 to $16.56, earning Lache a +9.8% average return and a 75% success rate on the stock.
However, Lache hasn’t always been so lucky with his recommendations. On April 19, 2013, he upgraded his rating for AutoNation, Inc. (NYSE:AN) from SELL to HOLD and raised his price target from $38 to $39. He explained, “Although a number of (likely) non-recurring items helped the quarter, we noted some significant bright spots in the Used and Parts / Service business that we believe have positive future implications and indicate that internal initiatives are bearing fruit. ” Lache has earned a -27.6% average return on this stock.
Conclusion
Will you be able to trust Lache on his latest recommendations based on his past performance history?
Carly Forster writes about stock market news. She can be reached at [email protected]
