UPDATE: J.P. Morgan Reiterates Neutral Rating, Raises PT on Tesla Motors on Mixed Factors

In a report published Thursday, J.P. Morgan analyst Ryan Brinkman reiterated a Neutral rating on Tesla Motors TSLA, and raised the price target from $42.00 to $55.00. In the report, Brinkman noted, “Our Neutral rating balances notable investment positives, including a highly differentiated business model, appealing product portfolio, and leading edge technology, with above average execution risk and valuation that seems to be pricing in a lot. Tesla is attractively saddled with none of the pension, OPEB, and other legacy costs which frequently burden large entrenched automakers. Its products are bold, distinctive, elegant, and highly entertaining to drive. The company is led by visionary leadership, backed by a management team with solid functional strength. Technology risk seems substantially less than was once feared. Execution risk, however, seems high: Tesla simply has yet to demonstrate it can produce Model S vehicles at the combination of volume and margin assumed in its business plan. Furthermore, expansion into higher volume segments with lower price points seems fraught with greater risk relative to demand, execution, and competition. Meanwhile, valuation appears to be pricing in upside related to expansion into mass market segments beyond the currently announced Model S and Model X segments, a scenario that we model in the out years but weight only 50% in our price target analysis.” Tesla Motors closed on Wednesday at $55.79.