Analysts notes, rating upgrades and other relevant news

Auzie · Feb 19, 2015

It might be helpful to have all analysts notes in one thread, for easier review.

Tesla Motors has received Neutral ratings in a recent Analyst update

13 analysts have provided their ratings, giving the average of 2.23. Research firm Zacks gives it ratings of 3.

1 analyst rated it strong sell
1 analyst rated it sell
3 analysts rated it hold
3 analysts rated it buy
5 analysts rated it strong buy

13 analysts have set the short term price target of 255.69. The standard deviation is estimated at 89.74 (high volatility).

Adam Jonas from Morgan Stanley has issued an update on Tesla. His new price target is 280. His ratings is overweight.

"If the Model X launches in August and does the things we think it can do, we believe this stock can set new highs by year end.

"As a proportion of revenues, Tesla will spend 10x as much as Ford on capex in 2015," he wrote, before adding, "Given the opportunity Tesla has to burrow into an auto industry ripe for change, we are comfortable with the firm's spending ambitions."
Jonas reiterated the "choice" auto investors have: "Invest in cash-rich traditional auto companies at low valuations doing BMW-style margins...or invest in the company we believe has the best opportunity to change the industry fundamentally despite burning cash and having no near term valuation support."

Auzie · Feb 20, 2015

Fox news bullish on Tesla?

Short Fox report discusses AJ from Morgan Stanley bullish outlook, without contradicting or dismissing it. Now something's not right in the universe

kenliles · Feb 20, 2015

Auzie said:
Fox news bullish on Tesla?
Short Fox report discusses AJ from Morgan Stanley bullish outlook, without contradicting or dismissing it. Now something's not right in the universe

My known world is exploding

Auzie · Feb 20, 2015

There is a Tesla rating list, 32 analysts

A number of research firms have recently commented on TSLA.

Analysts at Vetr downgraded shares of Tesla Motors from a “buy” rating to a “hold” rating and set a $260.22 price target on the stock in a research note on Thursday.

Analysts at S&P Equity Research reiterated a “hold” rating on shares of Tesla Motors in a research note on Friday, February 13th.

Analysts at Robert W. Baird set a $275.00 price target on shares of Tesla Motors and gave the company a “buy” rating in a research note on Thursday, February 12th.

Finally, analysts at Morgan Stanley set a $280.00 price target on shares of Tesla Motors and gave the company a “buy” rating in a research note on Thursday, February 12th.

Auzie · Feb 21, 2015

The latest Paulo Santos article on Tesla, Ripping the shorts' faces off, is unintentionally funny.

Paulo makes the argument for analysts' conspiracy in the case of Amazon and Tesla. He sees similar pattern of cutting down the estimates to unreasonable levels, just to promote the companies and set up the stage for a beat :biggrin:

.

EPS estimates were driven into the ground

This is so glaringly obvious that the actual guidance seems designed to be exceeded, and perhaps even by a significant margin. Either that or Tesla's business must really be running into trouble already.

The patterns are similar, we have the gap down because of the disappointing earnings, followed by a rally which wipes out all losses. This is as if the disappointment didn't matter and there was something already cooking for later.

All the while, the stock enjoyed the analysts' support even though they were slashing those estimates at the same time. Furthermore, not only were estimates being slashed, but some of those estimates/guidance were taken below what one would expect to be reasonable.

I thus wonder if this deliveries beat is going to be used to promote Tesla stock heavily, the same way the Q4 2014 report was used to promote Amazon.com stock in spite of nearly every other variable missing or being taken down, even 2 years into the future. The behavior of the stock and the analysts seems to say that this is, indeed, a possibility.

Thus, it seems that the Q1 2015 earnings report will be particularly dangerous for short positions (even if I wouldn't be surprised by a miss in some variables like revenues, or the need to take down future estimates even lower).

This means that I believe ultimately Tesla will be trading much lower than it does today. It might even have bankruptcy risk (something which is slowly emerging). But for now, I'll continue to sit in the sidelines and will wait for a better and less obviously rigged chance to sell it short. That said, I believe the market is about to have a short-term correction starting next week which could take Tesla down a peg or two.

Paulo apparently sees bankruptcy risk slowly emerging, rigged markets position on Tesla, drop in TSLA next week and short squeeze after Q1. I find his article amusing.

Robert.Boston · Feb 21, 2015

We've discussed whether Tesla is sandbagging Q1 here, and I have to admit it does look that way. Still, the willful misrepresentations in this article border on humor, and it would be great if lots of shorts take his advice and close out there positions. The resulting short squeeze would make this article a self-fulfilling prophecy.

Auzie · Feb 21, 2015

Robert.Boston said:
We've discussed whether Tesla is sandbagging Q1 here, and I have to admit it does look that way.

Not only Tesla, analysts have scaled down in their eps estimates, so in a way PS is correct. I disagree with his interpretation of such actions.

My view is that both Tesla team and analysts realize that Tesla's future path is difficult to execute and even more difficult to forecast. In such case, it is better to always be conservative. There is little upside and a lot of downside when giving too optimistic forecasts. High risk of falling short easily outweighs any temporary benefits of being too optimistic.

Similar logic may apply when communicating with customers about uncertain car deliveries.

PS seems to believe that such communication strategy is all a conspiracy to squeeze shorts. I believe that such communication on Tesla's part has nothing to do with sp management, it is just a natural learning evolution.

30seconds · Feb 21, 2015

Auzie said:
The latest Paulo Santos article on Tesla, Ripping the shorts' faces off, is unintentionally funny.

Paulo makes the argument for analysts' conspiracy in the case of Amazon and Tesla. He sees similar pattern of cutting down the estimates to unreasonable levels, just to promote the companies and set up the stage for a beat :biggrin:.

Paulo apparently sees bankruptcy risk slowly emerging, rigged markets position on Tesla, drop in TSLA next week and short squeeze after Q1. I find his article amusing.

For PS that was actually a coherent note. I am wondering about Q1 production guidance as well.

Auzie · Feb 21, 2015

30seconds said:
For PS that was actually a coherent note. I am wondering about Q1 production guidance as well.

On low Q1 guidance, PS argues that 1400 cars are already made in Q4 and thus Q1 guidance is relatively low compared to other quarters, if 1400 cars are part of it.

Somehow he fails to consider that such lag between production and delivery exists between all quarters. Thus it is entirely possible to have similar discrepancy between Q1 produced and delivered cars. That difference of produced and delivered cars will flow to Q2, and so on, from quarter to quarter, there will always be a carryover.

That carryover was perhaps larger between Q4 and Q1 due to a new model, seats issue and public holidays. Nevertheless, it is just a noise imo.

In their bias, bears see only one side of the story, low number.

Auzie · Feb 23, 2015

Lohn Lovallo of Bank of America Merrill Lynch issued a note on Tesla.

In a biting note, analyst John Lovallo calls into question the thesis that Tesla is a production-constrained company without any demand worries.

The investment firm and Lovallo have rode an Underperform rating on Tesla since 2013 when shares traded in the $30s.

BAML chiseled its price target on the EV automaker down to $65 from $70.

Any Tesla analysis different than above from JL should worry Tesla investors, considering his record.

His average return in the last year was -54%. 5 out of 16 of his recommendations had a positive return during the year. Such results are significant considerable misses in a strong bull market.:tongue:

JL ranks as 3477 out of 3498 ranked analysts based on their performance.

EarlyAdopter · Feb 23, 2015

Auzie said:
Lohn Lovallo of Bank of America Merrill Lynch issued a note on Tesla.

Any Tesla analysis different than above from JL should worry Tesla investors, considering his record.

His average return in the last year was -54%. 5 out of 16 of his recommendations had a positive return during the year. Such results are significant considerable misses in a strong bull market.:tongue:

JL ranks as 3477 out of 3498 ranked analysts based on their performance.

Ouch, that's pretty sad. So the contrarian play - do the opposite of everything this guy says - is the winning play.

MikeC · Feb 23, 2015

Auzie said:
His average return in the last year was -54%. 5 out of 16 of his recommendations had a positive return during the year. Such results are significant considerable misses in a strong bull market.:tongue:

JL ranks as 3477 out of 3498 ranked analysts based on their performance.

Wow, I think it takes a lot of effort to be that bad at your job. Simple incompetence can only get you so far.

Auzie · Mar 8, 2015

Dougherty & Co sets $325 pt for TSLA

Tesla Motors PT set at $325 by Dougherty & Co

Analysts issued a note on TSLA on Friday, with a 'buy' rating and a potential upside of approx. 67%.

Some other recent analysts targets:

Baird $275 buy note posted on Thursday, 26.2.2015
Barclays $190 hold note posted on Monday, 23.2.2015
Vetr $265.93 buy note posted on Monday, 23.2.2015
BOA $65 sell note posted on Monday, 23.2.2015

Consensus $261.72 buy 25 analysts

Auzie · Mar 10, 2015

Credit Suisse analyst Dan Galves issued a bullish note on Tesla

Outperform @290

Dan Galves has rated Tesla 19 times since August 2011, earning a 62% success rate recommending the electric car company with a +23.1% average return per TSLA rating. Overall, Galves has a 52% success rate recommending stocks with a +14.4% average return.

2015 is a challenging year for demand (Model S’s 3 third year of U.S. sales, Model X not meaningfully available until late 2015, China not yet a big market)

While these demand risks have been driving poor share performance, the reward is very high if Tesla can deliver 45k-50k Model S’s in this environment… We don’t believe that being production-constrained and having some minimal level of unsold inventory at dealerships are mutually exclusive. For one thing, we believe Tesla could sell more cars if they had a small number of unsold, new units at each store for the consumers that do not want to wait.

Relating to the concerns surrounding Tesla's residual value risk on increasing number of leased model S units, Credit Suisse says the auction values of the Model S still ride comfortably higher than other upscale sedans.

"While we certainly agree that Model S future residual values are extremely important, we’d note that auction values of Model S continue to run well-above the comparable luxury vehicles on which Tesla bases its projections …. Bottom-line is dealers are paying 70%-80% of total Model S price (before tax credit) at auction, whereas they are paying 50%-55% for BMW 7-Series and Mercedes S550. Model S auction volumes are still low, so we absolutely believe these percentages will come down over time. But, given the very significant difference today and the fact that these are Model S’s without dual motor or auto-pilot technology, we are very confident that, if anything, there is upside risk … for Tesla."

So Galves doesn’t think Tesla has anything to worry about here.

In fact, he thinks that the sturdiness of Tesla residual values means that, in the short and medium term, the Model S will significantly outperform other luxury sedans on used pricing. Which is actually very impressive — and an indication that demand for Teslas will remain strong moving forward.

Mr Galves also addressed Tesla's increasing finished goods inventory levels, which are being questioned after the company said it can generate all the needed demand at will. CS says the company's finished goods inventory jumping from $224 mill in the 3rd quarter 2014 to $397 mill currently is explainable.

"We don't believe that being production constrained and having some minimal inventory at dealerships is mutually exclusive. We believe Tesla could sell more cars if they had a small number of unsold, new units at each store for the consumers that do not want to wait."

Andrea James from D&C issued a note on Tesla 3 days ago, bullish rating of $325

Andrea James has rated Tesla 11 times since May 2011 with a 64% success rate recommending the company with a +24.7% average return per Tesla rating. Overall, James has a 55% success rate recommending stocks with a +8.7% average return.

“Model X is on track for test drives and launch this summer.” She added, “Tesla appears pleased with the progress on the Gigafactory and its work with partners. The Gigafactory is essentially on plan and ahead of schedule from a timing and cost perspective.”

TSLAopt · Mar 10, 2015

New note from Stifel. After a recent factory tour they reiterate their 400 Price Target. juicy details about paint shop improvements and aluminum casting...unfortunately these notes dont seem to move the stock up short term anymore, but they do instill more confidence for long term investors holding on through this storm of FUD

--------------------

Stifel is updating estimates on Tesla Motors (Nasdaq: TSLA) following a recent factory tour. The firm reiterates its Buy rating and $400 price target on Tesla.

Analyst James Albertine noted that he cannot emphasize how fast production capacity is growing. He sees Tesla producing 1,000 units per week with manufacturing efficiencies driving battery costs down five to 10 percent, and has significant "wood-to-chop" across the production spectrum, not the least of which includes a new paint facility, which is expected to come online this Summer.

Albertnine noted, Using paint as a proxy for further improvements, TSLA currently spends roughly 16 hours to achieve an "Aston Martin-quality" paint finish for its Model S (a higher rating relative to most mass-market German luxury brands). Once the new facility comes online, TSLA can (a) further improve the quality of its paint finish while (b) reducing production time to roughly 5 hours.

Albertine also touches on another investor concern: cash burn. TSLA is revolutionizing the manufacturing process, which considering the components/structures/systems that TSLA designs, manufactures, assembles, and services in-house, require as CEO Elon Musk put it in management's 4Q14 conference call "staggering amounts of investment." Using the example of aluminum castings, TSLA took the opportunity several years ago to acquire a primary supplier. Having experienced yields as low as 10 percent (only 1 in 10 parts met TSLA standards for production), TSLA is now generating yields closer to 95 percent by controlling the process in-house. That said, beyond paint and aluminum castings we believe TSLA is making investments to reduce battery cell production time that can continue to scale with the opening of the Gigafactory in the next 1-2 years, not to mention investments in infrastructure and distribution, which help to promote the relative advantages of electric-powered vs. gasoline-powered vehicles globally the analyst said.

Albertine lowers Q415 Model X delivery estimates from 9,000 down to 4,500 units and blended gross margin from 30.5 percent to 28 percent. The analyst noted that the new estimates aren't derived from management commentary as the firm hasn't received any new information in that regard. Albertine simply sees Tesla management taking a more prudent approach to the launch of the Model X.

For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.

Tesla Motors closed at $190.88 yesterday.

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would be nice to see if we could get the infamous Lovallo to at least take a tour...I would think he should for his own due diligence if he's going to be downgrading the stock every quarter

AlMc · Mar 10, 2015

TSLAopt said:
New note from Stifel. After a recent factory tour they reiterate their 400 Price Target. juicy details about paint shop improvements and aluminum casting...unfortunately these notes dont seem to move the stock up short term anymore, but they do instill more confidence for long term investors holding on through this storm of FUD

--------------------

Stifel is updating estimates on Tesla Motors (Nasdaq: TSLA) following a recent factory tour. The firm reiterates its Buy rating and $400 price target on Tesla.

Analyst James Albertine noted that he cannot emphasize how fast production capacity is growing. He sees Tesla producing 1,000 units per week with manufacturing efficiencies driving battery costs down five to 10 percent, and has significant "wood-to-chop" across the production spectrum, not the least of which includes a new paint facility, which is expected to come online this Summer.

Albertnine noted, Using paint as a proxy for further improvements, TSLA currently spends roughly 16 hours to achieve an "Aston Martin-quality" paint finish for its Model S (a higher rating relative to most mass-market German luxury brands). Once the new facility comes online, TSLA can (a) further improve the quality of its paint finish while (b) reducing production time to roughly 5 hours.

Albertine also touches on another investor concern: cash burn. TSLA is revolutionizing the manufacturing process, which considering the components/structures/systems that TSLA designs, manufactures, assembles, and services in-house, require as CEO Elon Musk put it in management's 4Q14 conference call "staggering amounts of investment." Using the example of aluminum castings, TSLA took the opportunity several years ago to acquire a primary supplier. Having experienced yields as low as 10 percent (only 1 in 10 parts met TSLA standards for production), TSLA is now generating yields closer to 95 percent by controlling the process in-house. That said, beyond paint and aluminum castings we believe TSLA is making investments to reduce battery cell production time that can continue to scale with the opening of the Gigafactory in the next 1-2 years, not to mention investments in infrastructure and distribution, which help to promote the relative advantages of electric-powered vs. gasoline-powered vehicles globally the analyst said.

Albertine lowers Q415 Model X delivery estimates from 9,000 down to 4,500 units and blended gross margin from 30.5 percent to 28 percent. The analyst noted that the new estimates aren't derived from management commentary as the firm hasn't received any new information in that regard. Albertine simply sees Tesla management taking a more prudent approach to the launch of the Model X.

For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.

Tesla Motors closed at $190.88 yesterday.

---------------------------

would be nice to see if we could get the infamous Lovallo to at least take a tour...I would think he should for his own due diligence if he's going to be downgrading the stock every quarter

Thank you. It is always good to see positive news confirming my thoughts that over the long haul (hopefully by second half of 2015) that we will get through all the 'negative news/growing pains/FUD' that has been rampant these last few weeks/months. On a personal level it gives me hope that my 2017LEAPS may go 'green' as they were only a few short weeks ago.:wink:

TSLAopt · Mar 10, 2015

AlMc said:
Thank you. It is always good to see positive news confirming my thoughts that over the long haul (hopefully by second half of 2015) that we will get through all the 'negative news/growing pains/FUD' that has been rampant these last few weeks/months. On a personal level it gives me hope that my 2017LEAPS may go 'green' as they were only a few short weeks ago.:wink:

Yes, this year seems like a gamble in terms of when sentiment will change. im thinking about exchanging my 2016 250s for 2017 310s

v12 to 12v · Mar 10, 2015

TSLAopt said:
New note from Stifel. After a recent factory tour they reiterate their 400 Price Target. juicy details about paint shop improvements and aluminum casting...unfortunately these notes dont seem to move the stock up short term anymore, but they do instill more confidence for long term investors holding on through this storm of FUD

--------------------

Stifel is updating estimates on Tesla Motors (Nasdaq: TSLA) following a recent factory tour. The firm reiterates its Buy rating and $400 price target on Tesla.

Analyst James Albertine noted that he cannot emphasize how fast production capacity is growing. He sees Tesla producing 1,000 units per week with manufacturing efficiencies driving battery costs down five to 10 percent, and has significant "wood-to-chop" across the production spectrum, not the least of which includes a new paint facility, which is expected to come online this Summer.

Albertnine noted, Using paint as a proxy for further improvements, TSLA currently spends roughly 16 hours to achieve an "Aston Martin-quality" paint finish for its Model S (a higher rating relative to most mass-market German luxury brands). Once the new facility comes online, TSLA can (a) further improve the quality of its paint finish while (b) reducing production time to roughly 5 hours.

Albertine also touches on another investor concern: cash burn. TSLA is revolutionizing the manufacturing process, which considering the components/structures/systems that TSLA designs, manufactures, assembles, and services in-house, require as CEO Elon Musk put it in management's 4Q14 conference call "staggering amounts of investment." Using the example of aluminum castings, TSLA took the opportunity several years ago to acquire a primary supplier. Having experienced yields as low as 10 percent (only 1 in 10 parts met TSLA standards for production), TSLA is now generating yields closer to 95 percent by controlling the process in-house. That said, beyond paint and aluminum castings we believe TSLA is making investments to reduce battery cell production time that can continue to scale with the opening of the Gigafactory in the next 1-2 years, not to mention investments in infrastructure and distribution, which help to promote the relative advantages of electric-powered vs. gasoline-powered vehicles globally the analyst said.

Albertine lowers Q415 Model X delivery estimates from 9,000 down to 4,500 units and blended gross margin from 30.5 percent to 28 percent. The analyst noted that the new estimates aren't derived from management commentary as the firm hasn't received any new information in that regard. Albertine simply sees Tesla management taking a more prudent approach to the launch of the Model X.

For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.

Tesla Motors closed at $190.88 yesterday.

---------------------------

would be nice to see if we could get the infamous Lovallo to at least take a tour...I would think he should for his own due diligence if he's going to be downgrading the stock every quarter

I am not finding any news of this at all in the common news streams. Will it be ignored by bloggers and reporters like the other previous estimates that were not negative?

Auzie · Mar 13, 2015

Adam Jonas super bullish

Morgan Stanley: Tesla's price could realistically multiply by 10:love:

This is a hyper-ambitious company, and the only one we cover whose stock price can realistically multiply by ten. It can also get cut in half. But we think patient investors will be rewarded if they can hang on for a wild ride.

Tesla’s all-electric power train makes the company one of the largest consumers of lithium ion batteries in the world, and it wants to be the world’s biggest producer of lithium ion batteries. How big? Like five times bigger than the next-biggest player.
By 2029 we estimate Tesla’s 6.5 million unit global fleet will contain a stored energy capacity of 410 gigawatt hours, an amount equal to the entire daily consumption of electricity in the nation of Mexico.

Around 60% of Tesla employees are involved in software engineering, versus a normal auto company at around 2%. This is important because the value added of software in a car rises from 5% today to 60% over the next decade.

AJ rightfully points out that the investment in Tesla is a rare opportunity. The potential reward far outweighs the risks, at least at this stage, as so many risky business hurdles are already behind.

The hurdles ahead are in pacing up the sales and supply chain. I would be surprised if there were no hiccups ahead. The nature of these hiccups is that they fall in the category of business as usual, whilst the hiccups in the earlier stages were more deadly.

brianman · Mar 13, 2015

Auzie said:
Around 60% of Tesla employees are involved in software engineering, versus a normal auto company at around 2%. This is important because the value added of software in a car rises from 5% today to 60% over the next decade.

Click to expand...

Hm. I wouldn't have pegged it anywhere near that high.

Analysts notes, rating upgrades and other relevant news

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