Baird Defends Tesla In Lieu Of Recent Downgrades, Sees 'Buying Opportunity'

Tesla Motors Inc TSLA shares are under pressure Wednesday following Pacific Crest's downgrade.

The morning draw-down follows Deutsche Bank's downgrade on Tuesday. Analysts at Baird felt obligated to opine on the action and issued a note defending Tesla, saying the company doesn't need China to hit full year targets.

"We believe recent downgrades, which have been largely valuation driven, donot fully value the Model X launch," Ben Kallo wrote. "Additionally, thereare several catalysts ahead, including additional details about the storage demand(which should be provided on the Q2 call), construction milestones and productionannouncements at the gigafactory, and the release of details about the Model III(prototype expected in March)."

Baird further believes that recent downgrades have been driven by a need to par gains following a 20 percent YTD appreciation and says "this is the wrong time to pull out of the stock" noting the fast approaching Model X launch and Q2 results release.

Baird rates Tesla at Outperform and has a PT of $335. Tesla shares traded down nearly 4 percent Wednesday morning to $257.54.