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  • Tesla (TSLA) Before And After The Numbers 0 comments
    Feb 21, 2014 11:47 AM | about stocks: TSLA

    After hours on Wednesday, Tesla Motors (NASDAQ:TSLA) shares rose more than 15% after it reported higher profits and plans for expanding its customer base in Europe and China. But before the results were in, analysts were busy making recommendations about the electric car company, including BUY and HOLD TSLA.

    Both Robert W. Baird analysts, Ben Kallo and Tyler Frank, had high expectations for the stock and recommended BUY TSLA. Even before they heard the details of Tesla's Q4 report, they raised their price target to $215 from $187. Ben and Tyler planned for a 2014 delivery guidance between 30,000 and 32,00, and they also have a feeling that Tesla will be opening up a second production line at its California facility. The pair noted that they, "might be early in this expectation and that increased production doesn't always mean increasing demand. However, Tesla already has a backlog of orders, so if it can increase production, it would probably be seen as a positive." Ben Kallo has a 17.6% average return over S&P-500 and an 86% rate of successful recommendations, and Tyler Frank has a 9.4% average return over S&P-500 and a 67% success rate of recommended stocks.

    However, analyst James Albertine of Stifel Nicolaus, exercised some caution and instead of a BUY rating, he recommended HOLD TSLA. James believes in Tesla's strength as a company, noting, "we believe TSLA can maintain profitability through the introduction of its Gen III vehicle, without relying on significant reduction in battery costs." And he also believes that "high-income early adopters will continue to drive global TSLA penetration." But, despite his initial thoughts, James has a few concerns. "Supporters look to Tesla's-electric-only driving range as a paradigm shift," but James is concerned, "with Tesla's under-developed retail/service distribution model." James also has an issue with the pre-owned Mode S pricing due to lack of testing for the mechanical structure and "new vehicle production ramp going more slowly than demand." James has a 4.8% average return over S&P-500 and a 50% success rate.

    Analysts also had a chance to make recommendations following the positive reports, including analyst Eliane Kwei. The Jefferies analyst recommends BUY TSLA saying, "TSLA posted 4Q non-GAAP EPS of $0.33, beating our estimate of $0.29 and consensus of $0.23." She noted that the numbers were higher due to a richer mix of sales and deliveries to Europe." She is ranked 28 out of 2403 analysts and has a 16.3% average return over S&P-500.

    On the other hand, Goldman Sachs analyst Patrick Archambault recommends HOLD TSLA. Patrick acknowledged a number of positive results from Tesla, but also found that, "With Tesla pointing to flat 4Q shipments in the US sequentially it does seem like the US has stabilized." Patrick is ranked 406 out of 2403 analysts and has a 2.9% average return over S&P-500.

    Some analyst made their recommendations before reports announced that the company earned $45.9 million in the quarter, almost 3 times higher than the previous quarter. While other analysts made their recommendations following new evidence of Tesla's business behavior. Who do you trust?

    Stocks: TSLA
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