UPDATE: Tesla Motors Price Target Raised at Goldman Sachs, Suggests Long Term Profit Potential
According to a research report published this morning, Goldman Sachs maintains its Buy rating for Tesla Motors (NASDAQ: TSLA) and raises its price target to $50.
Goldman Sachs mentions in the review, “We expect the impact of positive news to be amplified by the stock's 46% short interest of the free float. For shorter term investors our options research team believes the July $35 calls are attractive at current levels. Tesla is set to deliver the first Model S sedans this month, with press reviews expected in Jul and Aug. If the product delivers from a performance standpoint as we expect, we believe investors will be more willing to look to the higher volume Gen 3, which we do not believe is in the price. SLA 1 month at-the-money implied volatility is 49%, below its average of 55% over the past year and below the recent 3-month realized volatility of 55%. We recommend buying July options to gain focused exposure to the upcoming launch event, but we also believe buying longer dated options is attractive. As competition evolves, if more traditional OEMs leverage their scale they could offer competitive/better products at similar price levels, which would negatively impact Tesla's mkt share, although we see this possibility as quite far off.”
Tesla Motors closed yesterday at $32.09.
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