Baird Remains A Buyer Of Tesla At Current Levels

Baird Equity Research is a buyer of Tesla Motors Inc TSLA shares following the company announcement of autopilot software version 8.0 incorporating radar technology. Analysts Ben Kallo and Tyler Frank believe the electric vehicle maker's radar-based system would offer enhanced safety and functionality.

The brokerage pointed out that Tesla has cracked the primary challenges in respect to radar, especially object identification. Therefore, the analyst reiterated an Outperform rating and target price of $338 on the company's shares. This means the stock provides an upside potential of about 70 percent from the current levels.

Related Link: Analyst: Tesla Autopilots Switch From Camera To Radar Bad News For Mobileye

"Tesla also announced several upgrades that will ensure user attention while operating under autopilot. Version 8.0 will feature more prominent interface alerts and requirements to park the car before reengaging Autosteer if the user does not follow warnings. These upgrades should help prevent user error and improve safety," the analysts told clients in a research note.

The brokerage listed four factors supporting its thesis:

1. The ability to access a number objects.
2. Radar snapshots assembling every tenth of a second.
3. Fleet learning to put together geo-coded white list for objects.
4. Capacity to bounce radar from identifying upcoming object.

Above all, the lead analyst thinks the functionality of autopilot will improve. Significantly, the National Highway Traffic Safety Administration was satisfied with the changes.

Following the news, the stock advanced $3.68, or 1.89 percent, to $198.15.

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