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Goldman Sachs 'Warming Up' to Tesla (TSLA)

March 31, 2015 10:14 AM EDT
Get Alerts TSLA Hot Sheet
Price: $173.80 +6.25%

Rating Summary:
    24 Buy, 26 Hold, 13 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 8 | Down: 2 | New: 35
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Tesla Motors (NASDAQ: TSLA) is flat this morning, but one major stock influencer is warming up to the stock.

Goldman Sachs analyst Patrick Archambault said with shares of Tesla down 33% from the 9/4/2014 peak, versus a 4% gain for the S&P 500 during the same period, it has increased the attractiveness of the shares.

Archambault attributes part of the stock decline to lower gasoline prices, new EV entrants, the potential for downward estimate revisions, and incremental capital spend.

Addressing some of the concerns, Archambault notes:

  • First, while we have seen new EV product announcements, we believe few have the cost/range combination of the Model S and ultimately the Model X and Model 3, given industry leading battery costs that likely persist past the end of the decade.
  • Second, while we believe FX transactional costs could lead to near-term estimates revisions, we see the company increasingly operationally hedged on FX as its footprint expands internationally.

Tying it all together, the firm sees negligible changes to their 2020-2025 projections, "when Tesla's disruptive potential is likely to come to fruition, and where the bulk of Tesla’s value is captured, in our view."

While more constructive on the shares, valuation keeps the firm from upgrading to a Buy. As such, they maintained a Neutral rating and 6-month price target of $214.

For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.

Shares of Tesla Motors closed at $190.57 yesterday.



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