Tesla Motors Inc (NASDAQ:TSLA) has bounced back strongly in the market thanks to the excitement created by the battery business a few weeks ago. It has been reported that orders already placed for the Tesla Powerwall could be worth $800 million to the company this year. The big question at the moment is where the stock price is headed, even as analysts at Stifel Nicolaus affirm a $400 a share price target.
During an interview with CNBC, Stifel Nicolaus analyst, James Albertine reiterated that the EV giant will not need to rely on sales in China to make the $400 a share milestone.
Tesla Model S and Model X key
The run rate to the $400 a share mark according to the analyst will be driven by sales of Model S and Model X as Tesla Motors strives to deliver 500,000 cars by 2020.
“[..] In 2017 I am looking for 110,000 units of Model S and Model X that’s per the higher volume, lower price point vehicle at 25 times EBITDA on our estimate for 2017. That is about five times the average auto manufacturer; at that point the question becomes can they hit the 500,000 unit per year guidance for 2020. I think we are going to see a lot more confidence in that 500,000 number as we progress,” said Mr. Albertine.
To see a list of high yielding CDs go here.
However, the proposed run rate is not of concern to CNBC contributor, Brian Kelly, who believes it is the right time to start taking profits from the stock. A series of positive news reports has propelled Tesla Motors to the current trading highs of $240. Investors are waiting to see if the company will sustain the strong momentum going forward.
Time to book profits
Timothy Seymour just like Kelly believes it will be right to collect some profits once the stock hits the $260 mark while waiting for a buying opportunity when the company initiates a capital raise in the coming months. However, Pete Najarian disagrees affirming that the breakout to the upside driven by positive news could see Tesla Motors Inc (NASDAQ:TSLA) surge even higher from the current price.
“You are going to do one of the two things. You buy protection, and buy puts to the downside so you can allow yourself to stay in the stock, or then you do sell it, and you put in some calls to the upside. Take advantage of the low-low volatility but you doesn’t have to get out of the stock and miss the rest of the run,” said Mr. Najarian.
Update 07:29 EST: Analyst Trip Chowdhry of Global Equities Research, in a report issued on Tuesday ignored Tesla’s China issues but said the company was worth $385 per share. Referring to the company’s new permission to sell its vehicles in Maryland, the analyst said that Tesla could see a boost of 1,200 to 2,000 sales per year from the State.
Mr. Chowdhry estimates that around 0.1% of households will buy a Tesla, a number garnered from his research on other states where the car is currently on sale. His 1,200 to 2,000 estimate includes both Model X and Model S cars.