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Berenberg Positive On Tesla (TSLA), Says Benefits Derived From Gigafactory Scale Are Key To Execution, Maintains Hold

January 11, 2017 6:31 AM EST
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Price: $176.87 -1.65%

Rating Summary:
    23 Buy, 27 Hold, 13 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Berenberg commented on Tesla (NASDAQ: TSLA) from the North American International Auto Show in Detroit.

Analyst Paul Kratz comments "After showing analysts its Gigafactory plant in Nevada last week, the company again emphasised the competitive advantages this brings to Tesla. Speaking yesterday at the North American International Auto Show in Detroit, the company said it continues to see itself as the battery cost leader. Management added that, with traditional OEMs lacking battery capacity as large as Tesla’s, it should be relatively better positioned to capture upside in electric vehicle (EV) adoption. The company sees itself as the key catalyst for the transition to EV mobility, though a spate of recent EV launch announcements by OEMs such as Volkswagen (VW), Daimler and General Motors (GM) puts some doubt on Tesla’s claim that competitors lack EV models. However, there is relatively more visibility for Tesla because it is likely to have the most significant EV production capacity in the foreseeable future due primarily to its battery production capabilities."

Kratz says his PT of $193 is based on a probability-weighted scenario analysis.



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