Tesla (TSLA) Gets Minor, but Important, Victory in China; Stifel Maintains at 'Buy'
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Stifel affirms Tesla (Nasdaq: TSLA) with a Buy rating and $400 price target following news that buyers of a Model S in Shenzhen, China, will now qualify for a special new-energy license. Licenses have been limited to 20,000 units.
Analyst James Albertine commented, We view this as an admittedly minor victory, but an important milestone nonetheless, for future TSLA sales in mainland China. We are also encouraged, given the spate of bad publicity recently related to TSLA's roll-out in the Chinese market, that there remains a constructive debate around TSLA's potential sales into the market, despite its lacking a domestic manufacturing partner. We, like others, had assumed TSLA would be further along at this stage related to vehicle sales in China, which have come under scrutiny given reports of significant TSLA employee turnover in the market and perceived lack of customer demand. Today's reports do not resolve all fears of a slower roll-out in China, in our view, but we hope will add some stabilization to the negative sentiment. We also take this opportunity to reinforce our opinion that TSLA's success near term does not hinge on being an overnight sensation in China, though admit longer term, it will be difficult to reach management's volume goals without a firm role in what is now the largest auto market in the world.
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Tesla Motors closed at $199.63 yesterday.
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