Analysts go to the mat on Tesla

|About: Tesla Motors (TSLA)|By:, SA News Editor

With shares of Tesla Motors (TSLA) down nearly 40% from their recent highs, Wall Street is still vigorously debating if the stock is now cheap or still grossly overvalued.

Deutsche Bank's Dan Galves says the stock is now discounting pre-Gen 3 earnings and the sell-off creates a favorable entry point. "We are reiterating our Buy recommendation as we see a series of positive catalysts over the next several months that could lead to renewed confidence in earnings trajectory. These include: 1) A favorable resolution of the NHTSA investigation; 2) Initial news on (what we believe will be very strong) China order flows; 3) Increased visibility on an accelerating order/production ramp, and; 4) Further gross margin improvement and operating expense leverage (which may be significantly better than consensus). The firm maintained a Buy rating and price target of $200.

Meanwhile BofA's John Lovallo says shares remain overvalued even after the sell-off. He reiterates an Underperform rating and $45 price target, saying the company would have to 348K vehicles/year by 2020 to justify the current valuation.