Tesla Motors Inc can’t seem to lose the favor it has on Wall Street as analysts and buyers support its bullish thesis. News has it that an Oppenheimer analyst Colin Rush has also joined the bullish camp for Tesla as the research firm gushed over Tesla in a report note released on Tuesday. Now, Colin expects Tesla to “Outperform” the market and he has a $340 price target on the stock going forward.
The new coverage attests to the fact that Tesla’s Model X, the mass market Model 3, and the progress of the Gigafactory will help Tesla reach its goal of 500,000 cars yearly by 2020. The analyst posits that “we view Tesla as a transformative battery-powered product company with leading expertise in cell design, packaging, associated software, human-machine and machine-machine interaction design.”
The bullish case for Tesla
Oppenheimer’s $340 price target sets Tesla up with a 36.59% upside from its closing price of $248.91 in yesterday’s session. The bullish view on Tesla covers all the aspects of the firm’s business. The analysts think that Tesla has a unique change to make money from different fronts as it works on making cars green, moving away from fossil fuels, changing the face of transport, and challenging the ancient standards of the auto industry.
The analysts believe that the firm has a plan that would help its push to lead in the EV, self-driving, and energy storage markets. For one, Model X will appeal to women buyers and attract the SUV- market. Model 3 will attract regular buyers and take EVs mainstream. Gigafactory will provide economies of scale and reduce the costs of making EVs.
Analysts are positive on Tesla
A number of analysts such as James Albertine of Stifel are very bullish on Tesla Motors. Albertine has a $400 price target on Tesla. Dan Dolev of Jefferies, and Adams Jonas of Stanley have been vocal Tesla bulls in the last couple of months.
In July, Dan Dolev of Jefferies maintained a “Buy” rating on Tesla and he placed a price target of $360 on the stock. He opined that the firm had a $1 trillion market in Tesla Energy; he posits that the firm will have positive cash flow in Q4 and that its CapEx won’t increase in 2016.
He also posits that the pent up demand for the Model X will propel Tesla into a new level of growth. In his words, “Model X deliveries in 3Q could be symbolic, but strong pent-up demand (2-3x Model S pre-launch) and a quick 4Q production ramp-up are far more important for Tesla’s future, in our view”.