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Bank Of America Reiterates on Tesla Motors

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In a report published Wednesday, Bank of America Merrill Lynch analyst John Murphy reiterated an Underperform rating on Tesla Motors (NASDAQ: TSLA), raising its price objective to $65.00 from $45.00.

According to the report, during the Detroit Auto Show, TSLA pre-announced better than expected 4Q13 Model S volume of 6.9K units, which was above the company's outlook of slightly under 6.0K units and the analyst's 6.3K unit forecast.

“Given stronger than anticipated demand in the quarter, which was encouraging, we are raising our forecasts,” the report noted. “Specifically, we are raising our 2013e EPS from $0.65 to $0.75, 2014e from $1.85 to $2.00, and 2015e from $2.15 to $2.75. We also note that the average 2015e EV/EBITDA multiple for the group of 35 technology companies we use as a comp set for Tesla has recently expanded from approximately 13X to 15X. Therefore, we now apply a 15X EV/EBITDA multiple to our 2015e to derive our revised $65 price objective (roughly $10/sh of which is from a higher multiple). While 4Q13 volume was above expectations, we continue to view Tesla shares as overvalued and believe that yesterday's stock momentum could very quickly reverse. We reiterate our Underperform rating.”

TSLA closed Tuesday at $161.27 with shares trading up at 15.74 percent.

Posted-In: Bank of America Merrill LynchAnalyst Color Price Target Reiteration Analyst Ratings

 

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