Tesla Motors (TSLA) Price Target Reduced to $275 at Wedbush on GigaFactory Risk

March 27, 2014 11:53 AM EDT
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Wedbush maintained an Outperform rating on Tesla Motors (Nasdaq: TSLA) and reduced its price target by $20 to $275. Analyst Craig Irwin sees increasing GigaFactory risk.

"We take a moderately more conservative position on evidence of rising risks for Tesla's Giga Factory with a noncommittal commentary from Panasonic and supply chain indications that materials asking prices are rising," said Irwin.

"Panasonic today gave a business update where President Kazuhiro Tsuga said Panasonic has not yet committed to participating in Telsa’s GigaFactory as it could increase Panasonic’s investment risks. While Tesla contends the batteries Panasonic makes are their own technology and formulation, we note Panasonic is widely recognized as the world’s highest quality lithium ion battery manufacturer. Having Panasonic as a joint venture partner would facilitate strategic access to Pansonic's supply chain, and reduce risks in our opinion," he added. "We hear from various sources asking prices of battery materials are already starting higher on expectations for tight future supply on the ramp of Tesla's 35GWh GigaFactory."

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 $212.96 yesterday.

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