Tesla Motors (TSLA) PT Raised to $258 at Citi

October 1, 2018 7:37 AM EDT
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Price: $577.60 +1.03%

Rating Summary:
    21 Buy, 21 Hold, 11 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 4 | New: 24
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Citi analyst Itay Michaeli raised the price target on Tesla Motors (NASDAQ: TSLA) to $258.00 (from $225.00) while maintaining a Sell rating.

The analyst comments "We expect Tesla shares to recover some ground on Monday as Mr. Musk’s settlement injects a much needed dose of stability. That said, the SEC settlement doesn’t mark the end of the go-private saga, as substantial legal/regulatory/reputational risks remain (including DOJ)—all with the backdrop of a weak balance sheet. We still worry that the ramifications of last week’s events might linger on broader sentiment. With the settlement aside, the focus will now shift to Q3. To that, Sunday’s press reports (citing an employee memo from Mr. Musk) suggesting that Tesla is “very close to achieving profitability” will likely be interpreted differently by bulls & bears alike (“profitability” wasn’t defined), though “very close” probably won’t be viewed as wildly bullish, in our view. We’re lifting our price target to $258 from $225 on reduced downside risk post the SEC settlement, while still reflecting the lingering risks and overhangs that remain. We’re sticking with a Sell/High Risk rating until we can better assess the full legal/financial/reputational implications of the go-private saga, as well as the H2 financial picture including the sustainability of Model 3 demand/ASPs. With the expectation that the shares bounce back Monday, we still view the risk/reward as skewed somewhat negatively right now. "

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