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1 Overlooked 'Significant Positive' From Tesla's Shareholder Meeting

1 Overlooked 'Significant Positive' From Tesla's Shareholder Meeting
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Rod Lache of Deutsche Bank, who maintains a Buy rating for Tesla Motors Inc (NASDAQ: TSLA) and a price target of $245, highlighted a handful of positives from Tesla's recent annual shareholders meeting.

No Cannibalization

Lache, in particular, was concerned about how investors would perceive some of the comments made by Elon Musk and the rest of Tesla management.

Related Link: What Drives Elon Musk?

The executive team indicated that nearly one-third of Tesla’s upcoming Model S sales would come from the recently introduced Tesla 70D model, priced approximately at $75,000. “Most of these orders appear to be incremental, they do not appear to be cannibalizing the run rate of incoming orders for higher trim models," the analyst explained.

'Significant Positive'

The orders entail a 50 percent increase in orders from the observed run rate in Q1. The 70D model, Lache said, has expanded the market for Tesla products, to consumers who typically shop for luxury vehicles such as the Mercedes E-class and the BMW 5-series.

"This is a significant positive, as it should mitigate concerns about demand, and concerns that the 70D could prove dilutive to ASPs and margins."

Model X

The brand new Model X will start deliveries in about 3-4 months, Lache added. That's “consistent with the late Q3 timing,” and assumes that 7,000 of these models can be sold this year, he said.

Tesla shares have been on the rise in the past three months, increasing nearly 30 percent.

Latest Ratings for TSLA

Oct 2016Goldman SachsDowngradesBuyNeutral
Sep 2016Cowen & Co.Initiates Coverage onUnderperform
Jun 2016Argus ResearchDowngradesBuyHold

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings

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