UPDATE: Morgan Stanley Raises PT on Tesla Motors Following Capital Rise, DOE Loan Payoff

In a report published Friday, Morgan Stanley analyst Adam Jonas reiterated an Overweight rating on Tesla Motors TSLA, and raised the price target from $103.00 to $109.00. In the report, Jonas noted, “This capital raise impacts firm value. Just 2 weeks ago, the thought of Tesla raising $1.1bn of capital may have required a stock price in the $20s with significant dilution. Today, Tesla raises $1.1bn mostly through convertible notes at a 1.5% coupon and 35% conversion premium ($124.52). The consequences are positive for Tesla in terms of risk, growth and reputation. Paying off the DOE loan has positive image and reputational benefits that can resonate with the buying public and could help Tesla sell more cars. Additionally, the removal of covenants and other restrictions from the DOE loan help provide Tesla with more operational and financial flexibility – while realizing a modest financing synergy. We estimate Tesla should end 2Q with $211m of net cash (vs. $225m net debt in 1Q) and $871m of gross cash. Tesla's gross liquidity should now be equal to around 4 full years of capex.” Tesla Motors closed on Thursday at $92.25.