Tesla Motors Inc (NASDAQ:TSLA): being tested by analyst opinion

Posted by Chris Bell July 18, 2013 0 Comment 986 views


On Tuesday, Tesla Motors Inc (NASDAQ:TSLA) crashed by almost 14%. This decline had been caused by the bearish report that Patrick Archambault, the Goldman Sachs analyst had released. However, the company managed to gather its bearings on Wednesday. TSLA stock rose by 10.27%. It opened at a price of $106.52 per share, touched an intraday high of $121.62 and closed at $120.25. Almost 26.03M shares exchanged hands in the Wednesday trading session. The average volume of shares that were traded over a 30-day period was 9.26M. The company has a market cap of 13.90B.

The Tesla edge

Tesla seems to have been benefited from a largely positive report that Dougherty &Co’s analyst, Andrea James had released. The price targets for the electric car maker vary from $58-$200. James ended up raising her price target for Tesla shares from $90 to $200/share. In the note to investors, Andrea James said that they believe that at its maximum capacity the company is a $300 stock and that it had been polished down to $200 just for the execution risk.

Analysts made it a point to mention that TSLA was the only company that had demonstrated that electric car technology works and works well.

Strongly contrasting opinion

Contrastingly, Archambault, the Goldman Sachs analyst was of the opinion that Tesla is at risk and that it does not offer sustainability in terms of demand, in the long run. He stated that in the worst-case scenario the TSLA stock price would not go above $113/share. He also said that Tesla would be able to sell around 105,000 vehicles with an operating margin of 14.5% if there is a weakening of consumer sentiment on the company’s vehicles, in 2013.

He was also quick to point out that the share prices of car manufacturers tend to decline on increasing interest rates. This is possible even if the Fed finally decides to cut its bond buying initiatives.


About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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