J.P. Morgan reiterated its Overweight rating on Tesla Motors (TSLA), giving the shares a bit of a boost. They have a one year price target of $30 (about 30% upside) and a three year target in the $40 – $50 range. They believe the majority of the investment community is underestimating the potential of the company with its power-train (used by Daimler (DDAIF.PK) and Toyota (TM)) and non power-train technologies.
The argument out of JP Morgan is certainly a valid one, particularly with Toyota and Daimler on board with the technology, but I still feel that there are better longer term investments out there. For example Nissan (NSANY) which is launching the LEAF is up 50% since July and Toyota Motors (TM) is up 20% in three months. Tesla is down nearly 40% in two months and about flat since the summer highs.
I personally prefer to trade TSLA in the shorter term because it’s proving to be a good momentum stock in either direction. For example, the stock soared 50% in November alone, then initiated a 40% correction since. With the stock getting close to the November breakout point, it may soon offer another great trade entry, but there are too many uncertainties for a long term hold at this time in my opinion.
Disclosure: Author holds a position in TSLA