Argus Upgrades Tesla Motors (TSLA) to Buy

(Updated - August 8, 2017 7:24 AM EDT)

(updated to add analyst comment)

Argus upgraded Tesla Motors (NASDAQ: TSLA) from Hold to Buy with a price target of $444.00.

Analyst Bill Selesky says the primary driver for the upgrade is to reflect for strong orders for the Model 3. Selesky notes Tesla is currently receiving about 1800 Model 3 orders per day - without any advertising or other marketing campaigns.

The analyst said despite higher labor and overhead costs on the Model 3 ramp, they believe Tesla will achieve its 25% GM target on the Model 3 late in 2018, in line with the margins already achieved on the Model S and Model X. Selesky also forecasts costs related to the Model 3 (labor and overhead) will decline over the course of 2018.

FY 2017 EPS estimate rises from ($5.48) to ($5.36). The firm is boosting 2018 estimate to breakeven from a loss of $0.50 per share, reflecting expectations for lower expenses and higher sales. "We now look for Tesla to reach breakeven two quarters earlier than we previously expected and to achieve full-year profitability in FY19."

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 $355.17 yesterday.

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