Tesla Inc. shares rose 3% in early trading Monday, after Canaccord upgraded the stock to buy from the team and said the electric vehicle history is underappreciated on Wall Street.
"We believe in the last two quarters, and the latest guide for [the first quarter] has removed significant concerns for both the production capacity and the profitability of the critical model 3," says analyst Jed Dorsheimer in a note. "As such, we see a more stable 2019 with far fewer concerns for investors in the company."
Recent price cuts are further evidence that discounting has the desired effect, he said. With shipments to the EU and China looking strong, the "small profit" company
TSLA, + 3.12%
predicted for the first quarter will turn out to be the low of EPS for the year and may put the arguments from the short sellers to rest, he said.
"Our past corporate governance concerns were neglected with the addition of Larry Ellison and Ms. Wilson-Thompson as independent directors, and we believe that Elon Musk demonstrates a quieter behavioral characteristic of strong leaders," the analyst says.
In early January, Tesla announced that Oracle Corp.
ORCL, + 0.28%
co-founder would join the board along with a Walgreens Boots Alliance
WBA, + 0.26%
human resources executive, Kathleen Wilson-Thompson, as it moved to comply with one of the conditions of settlement with the Securities and Exchange Commission off by Musk in the aftermath of what became known as his go-private tweet earlier this year.
Musk instigated the regulator with a tweet, which meant he had secured funding for an agreement to take Tesla privately, since he really didn't. The CEO agreed that he and his company would each pay a $ 20 million fine that he would resign as chairman, and that the company would add two new independent directors to increase corporate governance.
Tesla's autopilote technology has an almost insurmountable lead in self-driving and will be the key to future transport, wrote Dorsheimer on Monday. And liquidity issues and concerns that a pending convertible note repayment should have been transferred by the company's cash flow generation of 1.23 billion. USD and cash on the balance sheet of 3.7 billion. USD, he wrote.
Canaccord raises its Tesla stock price target to $ 450 from $ 330, based on 30 times fiscal 2020 earnings per share. Stock estimate of $ 15.02, which Dorsheimer said may be conservative given the strong earnings growth expected in the coming years. The new target is about 44% over current stock price of $ 313.
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Wedbush analyst Daniel Ives, a long-standing Tesla tyrant, said on a Monday note that Tesla is changing from a production history to a demand history now that the first model 3 cars have arrived in Europe. Ives said he would be in Europe this week to measure demand and delivery logistics on the ground, especially in the Norwegian capital Oslo, which he expects to be "epicenter of demand for Model 3 with total EV sales grown in the country with 40% [or more] and a strong ramp is expected this year with Tesla, who is leading the tax. "
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With US vehicle tax credit reduced by 50% to $ 3,750 and then again to $ 1,875 on July 1, "Tesla's demand history in [the first half of 2019] is clearly shifting from the US to Europe as fictional Model 3 demand in the region will be the largest short-term stock factor for the stock, "Ives wrote.
Wedbush counts the stock for a purchase with a 12 month price target of $ 390.
Tesla shares have fallen 1.5% over the last 12 months while S & P 500
SPX, + 0.06%
reached 3.4% and Dow Jones Industrial Average
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