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Tesla Surging: What Wall Street's Saying


On the call, CEO Elon Musk said that he expects to have more than one partner for the Gigafactory, with Panasonic likely being one of them.

Analysts were mostly positive on the results, with several of them raising their price targets. Here's what a few of them had to say:

Jefferies analyst Elaine Kwei (Buy, $220 PT)

"TSLA posted 4Q non-GAAP EPS of $0.33, beating our estimate of $0.29 and consensus of $0.23. The strength came from higher ASPs on a richer mix of sales and deliveries to Europe. We think 2014 guidance for 35,000 deliveries, 28% gross margin by 4Q, and a production rate of 1000 cars/week by yearend upsided expectations. TSLA plans to hold a special call/announcement on its "gigafactory" for battery production sometime next week; no details were provided."

Deutsche Bank analyst Dan Galves (Hold, $220 PT)

"We lay out a case below that includes an optimistic scenario that Tesla gets to 450k units near the end of the decade at an EBIT margin of 15% (significantly higher than BMW, slightly below Porsche). This would drive about $19 of EPS. Even if Tesla were to get a 20x multiple at that time, the stock should trade at around $250 at the end of 2014 (20x 2019 EPS of $19, discounted back 3 years at 15%). In addition to the tight valuation, we believe the ramp in operating expenses, uncertainty around the giga-factory, uncertainty around distribution network needs to support higher volumes, and multiple competitor vehicles entering the market will make it difficult for investors to get a clear picture of the true late-decade earnings power/margin profile of the company. We'd look to get more constructive again on pullbacks or if the stock remains range-bound for an extended period."

Wedbush Securities analyst Craig Irwin (Outperform, $225 PT)

"We see strong positives in Tesla's credible path to longer-term battery cost reduction and the Gen-III vehicle target costs, and what we believe will be a receptive buying public willing to purchase EVs while retaining reasonable expectations for these vehicles. Tesla's multi-year lead over credible competition suggests the company is well positioned to deliver an aggressive volume ramp."

JPMorgan analyst Ryan Brinkman (Neutral, $137 PT)

"TSLA met its long-standing 25% 4Q13 gross margin guidance (widely not believed prior to 3Q earnings), reporting 25.2% excluding ZEV credits. Excluding all credits, gross margin tracked 23.7% in 4Q vs. JPMe 24.6%, benefitting from $15 mn of GHG credits vs. the $8 mn we had modeled. TSLA attributes +400 bps sequential gross margin improvement to a combination of volume-based purchase price reductions, increased manufacturing and supply chain efficiency, and fixed cost leverage, guiding for more of the same in 2014 (28% by 4Q14, which we now model)."

Morgan Stanley analyst Adam Jonas (Overweight)

"We believe we are witnessing the most disruptive intersection of manufacturing, innovation and capital experienced by the auto industry in more than a century.Tesla may be in position to disrupt industries well beyond the realm of traditional auto manufacturing. It's not just cars. Tesla remains our top pick in US autos."

--Written by Chris Ciaccia in New York

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