Berenberg Re-Starts Tesla Motors (TSLA) at Hold
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here.
Berenberg re-initiates coverage on Tesla Motors (NASDAQ: TSLA) with a Hold rating and a price target of $193.00.
Analyst Alexander Haissl commented, "We re-initiate coverage of Tesla with a Hold rating and a price target of $193. While Tesla is well placed to outperform a potential decline in US auto sales, we see this being offset by risks stemming from the launch of the Model 3 in late 2017/early 2018E and the merger with SolarCity. We forecast a 2016-18E non-GAAP EPS of negative c$2.5-$4.3 versus consensus EPS estimates in 2016-18E of c-$0.25-2.01."
He added, "The success of the Model S and, to a lesser extent, the Model X makes the Tesla investment case less about the adoption of electric vehicles and more about the company’s path to becoming a profitable OEM: This makes the debate on Tesla almost exclusively about the success of the Model 3. With the Model 3 priced attractively relative to peers, we think it should benefit from strong demand. Indeed, we expect group volumes to reach c561,500 units by 2020E from just c50,650 units in 2015 and forecast group revenues on a GAAP basis of c$27.9bn in 2020E from c$4.0bn in 2015."
"Automotive gross margins excluding zero emission vehicle (ZEV) credits could reach c24% in 2017E before deteriorating with the launch of the Model 3: Ahead of the Model 3 launch, higher volumes on the Model X should contribute to an improvement in automotive gross margins into 2017E. However, with gross margins on the Model 3 unlikely to exceed c15- 17% during the ramp-up phase, we expect automotive gross margin, excluding ZEV credits, to fall in 2018-19E before recovering to c22% in 2020E. Our 2020E estimates imply a c20% gross margin on the Model 3."
Shares of Tesla Motors closed at $184.52 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Mercury Computer (MRCY) PT Raised to $30 at Jefferies Following 2Q Report
- American International Group (AIG) PT Lowered to $69 at UBS
- Seaport Global Securities Upgrades Sanchez Energy (SN) to Buy
Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesTesla, Definitive Agreement, Model 3
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!