Tesla (TSLA) Gigafactory Continues to Ramp - Baird

Tesla (NASDAQ: TSLA) is gaining 1.7% Monday, in part after bullish comments from Baird analyst Ben Kallo following a tour of the company's gigafactory in Reno. The analyst maintained an Outperform rating and price target of $411.

Kallo notes the gigafactory continues to ramp, and they believe TSLA's battery cost reduction and capacity expansion efforts are on track. "Activity at the Gigafactory has increased since our tour in January, and we believe cost reduction and capacity expansion efforts are on track," Kallo commented.

In addition, the analyst believes the factory could produce up to 150 GWh of cells when fully ramped, and improved production processes should continue to drive battery cost reductions.

Further, Kallo expects the company's conversion cycle will improve with the introduction of the Model 3. "Management indicated the supplier payment terms are better for the Model 3 than Model S and X (which had a negative cash conversion cycle), which should allow for better working capital management as production ramps," he commented.

Initial Model 3 reviews have been positive and they expect additional vehicle reviews in Q4 as the car is delivered to customers.

Kallo expects the Tesla Semi, to be unveiled on October 26, to be disruptive to the trucking/delivery markets.

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 $379.81 yesterday.

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