Tesla Lifted to Buy at Jefferies on Public-Policy Support From China and Europe

Jefferies analysts lifted Tesla shares to buy while paring the price target 19%. The firm is encouraged by public-policy commitments from governments in Europe and China to support electric-vehicle sales.
Author:
Publish date:

Tesla  (TSLA) - Get Report shares were higher after Jefferies analysts upgraded the electric-vehicle producer's stock to buy from hold while slashing their price target 19% to $650 a share from $800. 

The firm is encouraged by public-policy commitments from governments in Europe and China to support electric-vehicle sales. 

Analyst Philippe Houchois also says the Palo Alto, Calif., company's balance sheet should remain in good shape.

Houchois expects Tesla sales to rise 27% in 2020, ahead of Wall Street's consensus estimates of 20% growth. 

Meanwhile, Baird analyst Ben Kallo says Tesla could fare better than its luxury peers as the economy recovers from the coronavirus pandemic. 

The analyst cited "new products and geographies driving growth, a potentially widening electric-vehicle competitive advantage, and over-the-air updates keeping vehicles fresh," Kallo wrote. 

"Similarly, U.S. auto [seasonally adjusted annual rates] took five to six years to recover to prerecession levels after declining about 35% between 2007 and 2009," the analyst wrote.

Baird rates the stock neutral with a $525 price target.

Tesla recently reported its strongest first-quarter performance ever, booking production and deliveries of 102,672 and 88,400 vehicles, respectively. 

Production and deliveries jumped 57% and 40% year over year, respectively. 

Production of the company's latest vehicle, the Model Y crossover, began in January with Tesla expecting deliveries by March. 

Despite the coronavirus, Tesla's Shanghai factory was able to hit record production levels. 

In 2019, Tesla delivered 367,500 vehicles, a 50% increase from the year earlier. 

Tesla shares at last check advanced 6.4% to $510.51.