The lovefest for Tesla Motors (TSLA) continued the day after the electric car company posted quarterly earnings that beat expectations and announced a deal with Panasonic (PCRFY) to build the world's largest battery factory in the U.S.
At $234, the stock jumped $10.86 a share, or 4.8% in afternoon market action.
In a recent note, Craig Irwin, an analyst with Wedbush, reiterated his Outperform rating and restated his $275 a share target price, defending a multiple of 30 times 2017 per share earnings forecasts of $12 as Tesla should be doubling per share earnings by that time." He wrote:
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.
Tesla has been a volatile and controversial stock with a vocal (to put it politely) group of bulls who are eager to defend the stock from an equally fervent group of bears.
Among the big concerns facing Tesla has been the lithium batteries that power the cars, an issue that Barron's Bill Alpert has frequently weighed in on.
Tesla delivered 7,579 Model S vehicles – its luxury sedan — in the quarter has broken ground on a battery factory. The company lowered its forecast for revenue and deliveries for the third quarter because of a temporary factory closure and vowed to ramp up production in the final three months of 2014 to reach its sales goal of 35,000.
Tesla says increased battery cell production by Panasonic will jumpstart production.
Meanwhile, Tesla is expanding in China, where it began delivering cars in April. It is also ramping up spending to develop its second-electric vehicle, an SUV named the Model X that Tesla expects to account for around half of annualized deliveries of 100,000 vehicles by 2015.
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