Right before Tesla Motors Inc (NASDAQ:TSLA)’s quarterly report at market close today, Jefferies has made headlines for its very bullish outlook on the electric car maker.
In a report on CNBC, Phil LeBeau explains why Jefferies analyst Dan Dolev has a bright forecast for Tesla Motors Inc (NASDAQ:TSLA).
Melissa Lee tells LeBeau that Jefferies has initiated coverage on the stock with an Outperform rating and a $350 per share price target. LeBeau says, however, that this is only part of the story because Dolev’s bull case for the stock is that it could go as high as $450 per share.
“Basically, when you read the Jefferies note, it boils down to these in terms of the optimism we are seeing from Jefferies. First of all, it believes that there will be demand for 500,000 vehicles annually by 2020. Remember, that is the target that has been set out there by Tesla,” LeBeau tells his colleague.
Furthermore, Dolev says in his note about Tesla Motors Inc (NASDAQ:TSLA) that the concerns Wall Street has about the company’s performance in China that have made headlines so much about over the last six to nine months are “overblown”.
According to LeBeau, Jefferies also believes that Tesla has a pure advantage relative to other electric vehicle companies when it comes to battery technology.
“The Tesla predictions also outline a few other reasons why Jefferies believes that this is a stock and a company that will have some staggering growth over the last few years. 36% annual growth in terms of revenue. The Model S and X margins which right now is in that 27% to 30% range they believe will get as high as 32%,” LeBeau explains.
Furthermore, he says that the firm is of the notion that the electric vehicle market, not just Tesla Motors Inc (NASDAQ:TSLA), is due to surge in sales.
LeBeau says that while it’s always interesting to see the numbers out of the company, everybody will be focused on the earnings call especially because of the stakes for the second half of this year with the Model X and the ramp up in production.
Daniel Benton’s Andor Capital Management owned 1.25 million Tesla Motors Inc (NASDAQ:TSLA) shares by the end of December.
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