Tesla Motors stock has climbed more than 12% so far year to date, but as shares go higher and higher, the company continues to garner bullish reports from analysts. The fundamentals went out the window in analysts’ price targets long ago, and even now, some (like Dougherty & Co.) continue to push their targets higher and higher.
Tesla on a tear
Tesla shares are beating both the NASDAQ, which has climbed approximately 7%, and the S&P 500, which has increased by less than 2% and has been lagging behind hedge funds off and on this year. For years now, Wall Street has been asking whether Tesla stock can keep climbing, and history proved that it could. But will the trend continue? Baird analysts say yes.
Interestingly, Baird analyst Ben Kallo upped his price target on the EV manufacturer to $335 (previous was $275), which is slightly higher than that of well-known Tesla bull Andrea James of Dougherty & Co. Her price target is $330 a share, which she raised it to just last week. Kallo and James are among the analysts with the highest price targets on Tesla. Kallo also maintained his Outperform rating on the EV manufacturer.
Tesla Energy products offer new revenue stream
One of the reasons Kallo believes there’s still time to get profits out of buying Tesla shares right now is because much of Wall Street remains skeptical about the company’s new energy storage systems and the upcoming Model X, which is slated for a fall release.
Despite very positive comments from management regarding early demand for Tesla’s energy storage systems, many aren’t convinced the systems will actually catch on. However, Kallo is convinced, just as James said in her report last week that she expects Tesla to do well in the energy storage space.
Tesla shareholder meeting set for tomorrow, other catalysts upcoming
The Baird analyst also sees a number of positive catalysts coming up, like the shareholder meeting that’s scheduled for tomorrow. Tesla management will probably give another update on how sales of their Tesla Energy systems are going.
They could also provide more details on the Model X, which Kallo notes will expand the company’s addressable market into the SUV/ crossover vehicle segment. Many investors question whether the orders Tesla has received for the Model X will convert into sales, but the Baird analyst thinks they will even though the automaker has seen more than one delivery delay for the vehicle.
Further, he notes that if the Model X is successful, Wall Street should be encouraged in Tesla’s “product development competencies” while also increasing the automaker’s scale. He states that history supports upward momentum from the Model X launch, as shares of Tesla soared from under $30 to almost $200 per share after the Model S launch. The analyst added that he doesn’t expect the increase from the Model X launch to be as dramatic as it was from the Model S, however.
Kallo also points out that Tesla’s second quarter delivery announcement is expected early next month, and he expects that to be another upward catalyst for the automaker’s stock. Looking further down the line, Tesla is expected to unveil the Model 3 prototype in the first half of next year.