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J.P. Morgan Maintains Tesla Motors As Overweight (TSLA)

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In a research report published today, J.P. Morgan reiterated its Tesla Motors (NASDAQ: TSLA) rating of Overweight. J.P. Morgan gave Tesla Motors stock a price target of $30.

In the report, J.P. Morgan states, "We continue to believe the majority of the investment community (and the majority of the automotive industry) is substantially underrating Tesla's potential, not just on electric vehicle power-train technology (where converts arguably have been made of Toyota and Daimler) but more broadly on its ability to deliver world-class non-powertrain related vehicle engineering and to eventually grow into a full-line premium carmaker with atypical cost competitiveness. Reiterate overweight with a DCF-derived $30 Dec 2011 price target and see a three year upside potential to $40-50. It is worth noting that our DCF uses a 8.3% terminal value operating margin assumption (German luxury carmakers typically achieve 6-9%); while it is too early to see if TSLA can establish a mid-teens operating margin structure sustainably as per management guidance, it is worth noting that each 1 percentage point higher operating margin assumption adds $4 to the stock's fair value in our DCF."

Tesla Motors shares are at $23.00 in pre-hours trading, down 0.17% from Friday's market close.

 

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