UPDATE: Deutsche Bank Downgrades Tesla Motors on Valuation

In a report published Thursday, Deutsche Bank analyst Dan Galves downgraded the rating on

from Buy to Hold, but raised the price target from $200.00 to $220.00. In the report, Deutsche Bank noted, “Production will ramp to 48k annualized by 4Q14 from 29k today (vs prior target of 40k by YE), driven by a meaningful increase in battery supply (already known) but also construction of essentially a second assembly line (Model S/X total capacity goes to ~80k). Gross margin targeted at 28% by Q4 (vs our prior est of 31% but ahead of Street's 26%). Operating expenses will ramp meaningfully, we est to $775MM in FY2014 vs 4Q13 run-rate of $580MM. Tesla will make a significant announcement next week surrounding the ‘giga-factory' that will likely drive a capital raise. We are downgrading to Hold from Buy on valuation.” Tesla Motors closed on Wednesday at $193.64.