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Tesla Shares Higher as Baird Lifts Target to $118, 'Confident' Co. Can Achieve Production Forecast for Gen III

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Tesla (NASDAQ: TSLA) shares are up more than 3 percent in pre-open action following a raised price target on some positive comments from Baird's Ben Kallo.

The analyst now sees shares of Tesla rising to around $118, up from the prior price target of $70.

Kallo said he's confident in Tesla's chances to achieve its Gen III production forecasts amid the company's strong cash position and success of the Model S. He called Gen III “within sight," even though there has not yet been a great technological breakthrough. Kallo suggested many of the bear cases have been “overcome."

Kallo also noted Tesla leads the industry in battery cost, and said he expects further reductions as advances in lithium-ion technology become more prevalent.

The launch of Tesla's SUV, the Model X, may double demand for the Model S platform, according to Kallo. This could require additional production capacity.

Kallo believes Tesla could boost its production of the Model S and X from 40,000-50,000 currently to near 80,000-100,000 by "as early as next year."

The Baird analyst maintains an Outperform rating on shares of Tesla.

With the stock last trading at $97.64, Kallo's new price target represents potential upside of about 21 percent.

Latest Ratings for TSLA

DateFirmActionFromTo
May 2015JefferiesInitiates Coverage onBuy
Apr 2015JP MorganMaintainsUnderweight
Mar 2015Argus ResearchInitiates Coverage onHold

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