Analysts Split On Tesla Outlook

| About: Tesla Motors (TSLA)

Summary

3 different analysts; 3 different recommendations.

Bearish Barclays predicts severe delays for Tesla'a Model 3 vehicle.

Bullish Robert W Baird assigns $338 Tesla price target (46% upside).

Analysts are conflicted in their outlook for automaker Tesla (NASDAQ: TSLA), with Barclays predicting that severe delays will result in zero deliveries for Tesla's all-electric Model 3 car in 2017.

Barclays: Sell

If Barclays' analyst Brian Johnson's bearish predictions for the coming year prove correct then Tesla looks set to experience a very disappointing 2017.

Johnson believes that there is a high probability that Tesla will announce a Model 3 delay at some point leading to zero deliveries this year. The analyst penned this imaginary tweet from Tesla CEO Elon Musk:"Great progress so far on Model 3, but still have a number of tweaks ahead - thus will take a little longer than expected."

The automaker recently announced disappointing Q4 numbers of 22,200 vehicle deliveries due to production glitches. Tesla was subsequently 3,000 deliveries short of its 80,000-delivery end-of-year target for its existing Model S and Model X vehicles.

Johnson assumes a $1.5 billion equity raise in 1Q'17 (with a predicted Musk tweet of: " Time to derisk with a capital raise.") and significantly reduced growth for Tesla's recent $2 billion acquisition SolarCity. Tesla will wait until regulatory and economic conditions are more favorable before expanding roof solar panel installer SolarCity, Johnson thinks.

According to financial accountability engine TipRanks, Johnson is ranked #1,158 out of 4,348 analysts. He reiterated his sell rating for Tesla on Jan 5 as he sees the Model 3 delay leading to a share sell-off, but declined to give a price target.

Oppenheimer: Hold

Top Oppenheimer analyst Colin Rusch has been busy musing on Tesla's Gigafactory in Nevada. Although in the long-term he finds potential for Tesla stocks to go higher, Rusch is currently cautious over the significant risks involved in the factory's ramp-up to production.

Following a Gigafactory tour, Rusch writes "Management focused on TSLA improving manufacturing density and velocity as key to the company's success over the long term. We would agree with management and believe GM over the coming quarters will be an early indicator of how the company is doing on that front."

But he warns that even though Tesla is off to a good start, "the magnitude and complexity of what TSLA is trying to accomplish over the next two years along with the potential bottlenecks remains sizeable."

Rusch, who has a four-star rating on TipRanks with an 8.6% average return, reiterated his hold rating for Tesla on Jan 5 without a price target. This accords with the 'hold' analyst consensus rating for Tesla on TipRanks.

Robert W. Baird: Buy

Robert W. Baird analyst Ben Kallo remains undeterred from his bullish outlook for Tesla stock. TipRanks reveals that Kallo has a 63% success rate on Tesla stock and an average return on the stock of 24.3%.

According to Kallo, "Management indicated temporary production delays due to the transition to the new Autopilot hardware adversely affected deliveries in Q4, but we believe strong customer demand and a large number (>6.4k) of vehicles in transit will drive shares higher."

Kallo concluded "We continue to recommend shares ahead of the Model 3 production ramp." He assigned a buy rating to Tesla on Jan 4 with a price target of $338 which translates into a considerable 46.14% upside from Monday's close. As this TipRanks graph shows, Kallo's price target is the highest analyst price target for Tesla.

In contrast, the lowest price target is $155 and the average analyst price target for Tesla is $230.25 which represents a marginal 0.45% downside from Monday's close.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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