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Thread: Analyst Reports/Targets

  1. #21
    S P3112 ~ X P6117 mulder1231's Avatar
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    Quote Originally Posted by blakegallagher View Post
    I found this article that mentions a new Morgan Stanley report but I can not find the actual report ... Can anyone post me a link? http://www.valuewalk.com/2013/04/ms-...ow-20-a-share/ .... What is a misprint referring to the April 16th report?
    There was an April 26 research note, titled "Billionaire's Poker".

    In this note they are reiterating their concern about the Tesla order book (based on delivery estimates now 1 month after ordering), and explain why this concern is not reflected in the current stock price, with four theories:

    1. Income from ZEV credits (JP referred to this in his recent post on Seeking Alpha)
    2. Model S prospects in China
    3. Tesla is in a strong position to raise additional capital
    4. Model S is just a damn good car

    I particularly liked the last one, and the comment about a group of BMW engineers who did not think Tesla would be able to pull it off:

    Lost in a sea of blogs, trades and tweets is one truth: The Model S is a damn good car. Each day that goes by where Tesla delivers 60 units without images of flaming Model S’s on YouTube offers incremental validation for what it has accomplished. At a recent presentation, we asked a room full of 30 BMW engineers if any of them thought Tesla would make it this far. Not one hand went up. These guys just won't go away.
    - - - Updated - - -

    Regarding the ZEV credits and JP's negative take on it, this is discussed at length in the Nonsense-from-John-Petersen thread starting here.

    Morgan Stanley has a more interesting take on it:

    ZEV credit CARBitrage. Tesla made $40.5m in selling ZEV and GHG credits to other OEMs in 2012, or $13.9k per completed vehicle. The negotiated value of the credits is function of penalty avoidance ($5k), reputational protection and development cost risk management by non-complying OEMs and the supply of ZEVs from competing EVs. A similar ‘Rev per ZEV’ could add $250m to Tesla profit in 2013. Unlikely, but what if? CARB's rules and failing EV competition funnel an unusual concentration of economic benefit to Tesla.
    Last edited by mulder1231; 04-28-2013 at 01:46 PM.
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  2. #22
    Senior Member brianman's Avatar
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    Quote Originally Posted by mulder1231 View Post
    Tesla made $40.5m in selling ZEV and GHG credits to other OEMs in 2012, or $13.9k per completed vehicle.
    Let's go with the simple $100k that people like to keep quoting. 13.9% is kinda huge.
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  3. #23
    S P3112 ~ X P6117 mulder1231's Avatar
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    Cross post from the TESLIVE Speakers and Topics thread, as people here may know some analyst that should be invited to participate in a TESLIVE session on investing.

    Quote Originally Posted by mulder1231 View Post
    Yes, if you could get some of the brains from the investors thread on stage (Citizen-T, Robert.Boston, luvb2b, smorgasbord, Curt Renz, etc.) as panelists with moderator Adam Jonas from Morgan Stanley, would make an awesome session.

    "How to pay for your next Tesla with TSLA"
    TESLIVE seems to like the idea of a panel on investing strategies with an analyst as moderator.

    However, Adam Jones from Morgan Stanley is not available. So here are some additional names of analysts who are regulars on the Tesla earnings calls that I suggest the organizers check into as possible moderator for a session at TESLIVE:

    Himanshu Patel - JPMorgan, Senior Equity Analyst (has followed automotive sector for eight years)
    Andrea James - Dougherty & Company, Vice President, Senior Research Analyst (has been on Bloomberg)
    Patrick Archambault - Goldman Sachs, Vice President, US Automotive (has been bullish on TSLA)
    Dan Galves - Deutsche Bank, automotive research VP (conservative $35 target)
    Carter Driscoll - Capstone Investment, Wall Street analyst (slapped a sell rating on Tesla three years ago)
    Ben Schuman - Pacific Crest (liked Musk fighting back NYT Broder episode)
    Ravi Shanker - Morgan Stanley, Vice President and Lead Analyst for the North American automotive sector
    John Licata - Blue Phoenix, Energy strategist (has been on Fox News)
    Amir Rozwadowski – Barclays Capital (Tesla top pick in clean tech)
    Elaine Kwei – Jefferies & Co. (has been on Bloomberg)
    John Lovallo – Bank of America-Merrill Lynch (downgraded Tesla after Q4 earnings last February)
    Ben Kallo – Robert W. Baird, expert green tech analyst (has been on Bloomberg w/ Cory Johnson)
    Aaron Chew - was Maxim Group analyst covering Tesla, now VP of Investor Relations at SolarCity

    If you have any other suggestions, or a particular preference for one of the above, please comment.
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    not quite a magazine cover, but sure seem strange / horrible idea to have a panel like this. In my opinion TSLA is a very high risk stock (I'm long) and should be treated accordingly to the investing public

  5. #25
    S P3112 ~ X P6117 mulder1231's Avatar
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    Quote Originally Posted by 30seconds View Post
    not quite a magazine cover, but sure seem strange / horrible idea to have a panel like this. In my opinion TSLA is a very high risk stock (I'm long) and should be treated accordingly to the investing public
    Well, maybe you misunderstood. The panel would not be the list of analysts listed in my post, but would consist of TMC members sharing their investor experience and opinions on TSLA.

    We'd invite just one analyst as the moderator. In my opinion it would be interesting and educational, especially if they pick an analyst who is not so bullish on the stock, that could make for interesting discussions and perspectives.
    Last edited by mulder1231; 04-30-2013 at 02:53 PM.
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  7. #27
    S P3112 ~ X P6117 mulder1231's Avatar
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    Morgan Stanley preliminarily ups price target to $77, based on new Tesla guidance, while needing more time for a full review of all variables, now that Tesla has moved passed the viability question:

    Our rating, estimates and PT are under review, pending our analysis of changes to the company’s business model, addressable market and the associated risks. Taking nothing away from the accomplishments of the Tesla team, triangulating the fundamental valuation with the share price is more challenging than for other stocks.

    Preliminary changes to our earnings model: We raise our FY Model S volume forecast to 21k units from 18k previously, adopting most of the company’s full year guidance including a 4Q gross margin of 25% before ZEV credits. We have assumed $171m of ZEV revenue for the full year (incl. the $68m in 1Q). We have adopted new revenue recognition for the ‘pseudo-lease’ product, with reductions to net income, but no cash flow impact.
    Here's how they arrived at the preliminary $77 target:

    At $77 and assuming 10x EV/EBITDA (Harley-Davidson multiple), implies >$1bn of EBITDA, the equivalent of selling 65k cars (at $80k rev/unit) at a 15% OP margin, or 140k cars (at $50k) at a 10% OP margin. Using a BMW multiple of 3x EBITDA, the current price implies 215k cars (at $80k) with a 15% OP margin or 470k cars (at $50k) at a 10% margin.
    Last edited by mulder1231; 05-13-2013 at 01:11 AM.
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  8. #28
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    Quote Originally Posted by mulder1231 View Post
    Morgan Stanley preliminarily ups price target to $77, based on new Tesla guidance, while needing more time for a full review of all variables, now that Tesla has moved passed the viability question:



    Here's how they arrived at the preliminary $77 target:

    imo they're using the wrong multiple (as many will no doubt); Given the leverage points of new scales achievable and complete industry disruption spanning cars-fuel-infrastructure, the multiples on this stock will outstrip any current auto mfg for many years imo (and rightfully so).
    Harley Davidson? got to be kidding me- a brand so established, they've made the same sound for 100 years
    In my view, This is more evidence - they just don't get it and won't for a very long time

  9. #29
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    Agreed. Multiple is too low. They need to stop comparing to automakers and start looking at tech companies for a comparable multiple.

  10. #30
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    Quote Originally Posted by Citizen-T View Post
    Agreed. Multiple is too low. They need to stop comparing to automakers and start looking at tech companies for a comparable multiple.
    How does that end up working, say 7-10 years from now, when other auto makers have EVs? Do their multiples go up? Does Tesla's come down?

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