Close

Stifel Positive on Tesla (TSLA) Following Model X Launch; Concerns Appear 'Overblown' for Now

September 30, 2015 8:58 AM EDT
Get Alerts TSLA Hot Sheet
Price: $175.79 -2.25%

Rating Summary:
    23 Buy, 27 Hold, 13 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
Join SI Premium – FREE

Stifel affirms its Buy rating and $400 price target on Tesla Motors (Nasdaq: TSLA) following Tuesday night's Model X launch.

Analyst James Albertine offered the following commentary:

We are pleased to see TSLA achieve another milestone, the launch of its highly anticipated utility vehicle, the Model X, after some months of speculation that the vehicle may be further delayed due to various “design” concerns, including the operation of the falcon-wing rear doors. Those concerns, for now at least, appear overblown, though we remain cautious as it relates to ramping production of the newest TSLA vehicle as roughly 20-25% of the production process remains outsourced. We are encouraged by TSLA’s announcement of 25k preorders, though we are not sure what to make of the comment with respect to prior expectations for 2015/2016 production & delivery estimates. We expect management will remain cautious in accelerating the Model X production line during 4Q15 and into early 2016, which we support as a widespread vehicle recall would prove a costly error. Lastly, we will be watching for hints related to Model S cannibalization, which we believe is a logical/expected consequence of any new vehicle launch. However, we find balance to our cannibalization concerns given the nascent stages of Model S vehicle deliveries across many markets (EU still ramping, opportunities throughout Asia-Pacific/Middle East) and substantial Model S vehicle updates coming soon (including industry-leading autonomous-drive features).

Albertine also noted Model X safety feature commentary:

Management praised the Model X as “the safest SUV ever”, having earned an overall 5 star rating in every category, which we believe may be a first for any SUV. TSLA noted that chances of a serious injury in the Model X is closer to 6.5% versus 10% for other comparable vehicles, which is primarily due to (a) larger front crumple zones allowing for force distribution (given the lack of a combustion engine), (b) better side impact protection, which is roughly half the potential intrusion of the next best SUV, according to TSLA, and (c) substantially reduced rollover propensity vs. other SUVs.

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



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments

Related Entities

Tesla