Got a tip?: tips@bullonthestreet.com
Email: info@bullonthestreet.com

Tesla Shares Get a Big Jump on Bullish Notes from Analysts

Electric vehicle maker Tesla saw its shares climb 8% on bullish notes from Baird and Bernstein analysts.

The stock skyrocketed after Bernstein analyst Toni Sacconaghi wrote in a note to clients, “We think the [Tesla] setup in sentiment looks relatively favorable for the next few weeks. We now see the near-term risk-reward for Tesla as relatively skewed to the upside, given the potential for the stock to revert towards the middle of its $270 to $370 range.”

Shares were also gaining on a note from Baird analyst Ben Kallo, who recently had a tour of the company’s Gigafactory 1 in Nevada.

“We recently toured the Fremont factory and came away incrementally positive. Gigafactory 1 creates a significant barrier for competition and manufacturing capability should be a competitive advantage for TSLA over the long term. We believe TSLA’s Gigafactory enables the company to drive down costs through an industrialization of battery pack assembly and economies of scale,” penned Kallo.

Recently a non-professional post was published on Cleantechnica.com by Wietze Post, who wrote, “Tesla’s present sales do not only displace other ICE brands’ sales today, but future sales of those other brands as well, perhaps even 4X as many over the course of time. Tesla’s are designed to last for a long, long time. Tesloop’s vehicles are clocking up mega miles and will do many more.”

“Due to Tesla vehicles longevity, they will not be replaced by new vehicles within the vehicle fleet (seen as a whole) for a long time. They may be resold as used, but the used vehicles will last for an extraordinarily long time. People will sell their Teslas because they’ve grown tired of looking at them, not because they’re broken.”

“The whole new-car sales market will become smaller (also due to other influences). The average price of new vehicles will also trend lower, because when there are very good used vehicles available at a low price, then it won’t make much sense to pay much more for a new car. This will ultimately result in a larger proportion of Teslas on the road than we would now expect, compared to other brands with a shorter lifespan.”

“Tesla’s speed of ramping up production and being ahead of others with actual sales will have a disproportionate impact on other ICE brands’ future sales. Because the legacy brand has no (or insufficient) EVs available to sell, the buyer will get a Tesla, at which point the legacy brand has lost that client ‘forever’.”

“Another aspect is that Tesla has to future-proof their vehicles and anticipate technology (such as level 5 autonomous drive) which will keep their vehicles up to date even twenty years from now. Teslas’ longevity will also benefit our environmental impact.”

Shares of Tesla have suffered in the last few weeks, dropping over 20% as CEO Elon Musk faced backlash over smoking marijuana on a Joe Rogan podcast and his controversial tweet (a plan that he has abandoned) on considering taking Tesla private and having “funding secured.”

Leave a Comment