Tesla (TSLA) Stock Price Target Increased at Jefferies

NEW YORK (TheStreet) -- Shares of Tesla Motors  (TSLA) are rising 0.48% to $266.43 in morning trading Thursday after its price target was hiked to $360 from $350 at Jefferies which reiterated its "buy" rating.

The firm also raised 2015 earnings estimates to $0.51 from $0.49 per share, with 2016 earnings estimates increased to $4.52 from $4.37 per share.

On average, owners were willing to pay 60% more for a Tesla, so that introducing Model III by 2017 should help Tesla tap into the $35,000 price point, Jefferies noted.

"Our detailed analysis of actual North America sales and pricing by make and model across more than 200 different models implies an aggregate global TAM (Total Available Market) of 19 million vehicles for Models S," Jefferies analysts said.

Additionally, customer survey highlights exceptional brand loyalty that 85% respondents noted that their next car would be a Tesla, Jefferies added.

Tesla Motors designs, develops, manufactures and sells electric vehicles, electric vehicle powertrain components and stationary energy storage systems.

Separately, TheStreet Ratings team rates TESLA MOTORS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate TESLA MOTORS INC (TSLA) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TSLA's very impressive revenue growth greatly exceeded the industry average of 6.9%. Since the same quarter one year prior, revenues leaped by 51.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • 35.88% is the gross profit margin for TESLA MOTORS INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -16.40% is in-line with the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Automobiles industry and the overall market, TESLA MOTORS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$131.79 million or 317.33% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: TSLA Ratings Report

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