Tesla Motors Inc (NASDAQ:TSLA) caused a little nervousness in recent weeks after it issued a recall for all the Model S it has ever sold because of faulty seatbelts. Tesla might, however, enjoy some tailwinds going forward as Goldman Sachs sees a bright outlook for firms in the green energy sector. On Tuesdayy Goldman Sachs issued a note with Green energy stocks as its focus – the note has as its backdrop the climate change summit holding in Paris.
Goldman Sachs believes that the renewed interest in green firms should lift the fortunes of Tesla Motors and other players in the Green space. Goldman Sachs believes that firms working in the solar, wind, LEDs, hybrids and EV space might see strong tailwinds going forward. On the heels of the bright outlook for Tesla and other green stocks, analysts at Credit Suisse has a $4 earnings per share on Tesla Motors for fiscal 2016.
Tesla Motors is the greenest of auto makers
Tesla Motors Inc (NASDAQ:TSLA) is the greenest of all auto firms because it makes pure EVs. Some auto brands have hybrid cars that can run on gas and clean energy sources, some other startups are also entering the EV space; yet, Tesla Motors is the only EV marker with more than a handful cars on the roads. Tesla’s has a first mover edge in the EV space and Goldman Sachs believes that this edge will help Elon Musk take the driver’s seat.
A key theme during the Paris climate change summit is the resolve to force auto firms to invest more in low emission techs. Economies of scale and costs have slowed the adoption of low emission tech by auto firms. Goldman Sachs believes that Tesla Motors’ Gigafactory project would help the firm achieve decent cost reductions on the batteries of EVs.
Tesla Motors has the facility to make batteries for EVs on a large scale and at a cheaper price. Hence, it would be miles ahead of its rivals when they are forced to invest in clean tech. More so, Tesla runs a zero emission program and it makes money from other auto firms through the carbon credits that it sells to them.
Goldman added that wind and solar are likely to be the ultimate victors in the search for new sources of electric generation. The research house says that nuclear and hydro-power generation, and biofuels lack the scale or momentum to form a real solution. That means, in the view of Goldman at least, there’s a good chance that we’ll be driving wind-powered Tesla Motors Inc cars in the decades to come.
Credit Suisse sees EPS of $4 From Tesla Motors in 2016
Analysts at Credit Suisse believe that Tesla Motors Inc (NASDAQ:TSLA) should be able to meet up with its fourth quarter guidance and that the firm would have less problems with delays and delivery in 2016. The analysts say, “The debate on Tesla stock remains focused around short-term issues, namely Model X production ramp and fourth-quarter volume. We expect both these issues to be addressed in a positive way by early January when Tesla discloses fourth-quarter volumes.”
They expect Tesla to report EPS of $4 in fiscal 2016. In their words, “Our view is that 2016 will be a year of substantial volume growth, but more importantly is a year where selling, general and administrative (SG&A) costs/ R&D expense growth should slow and a year where plant disruption will be minimal compared to 2015.”