New Base Model S Indicates Consumers' Willingness to Spend More on Tesla (TSLA), Not Less - Stifel

Stifel affirms Tesla Motors (Nasdaq: TSLA) at Buy with a price target of $400 after the company announced its new Model S 70D sedan today, which will become the entry level model for the company.

Analyst James Albertine commented, We believe it is interesting in light of the ongoing debate among TSLA Bulls and Bears, which hinges, to a degree, on the demand for electric vehicles globally, that new product announcements over the past six months seem to indicate that customers are asking for ways to spend more, not less, on TSLA products. TSLA product enhancements over that period have focused on performance, all-wheel drive, and autonomous features, all of which positively impact transaction prices.

Further, we have seen no evidence of discounting in the market, and believe residual values for existing units continue to track well ahead of peers and TSLA's own internal expectations, on which its residual value guarantees are based.

Simply put, we believe TSLA is a supply-constrained story, not one that is demand-constrained, and would view these product developments as support of that position. We also believe Bears fail to give credit to TSLA's pronounced competitor advantage, which is mounting each day as production ramps and additional data is gathered and mined among existing TSLA vehicles.

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

Tesla Motors closed at $203.25 yesterday.

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