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Chowdhry: How Tesla Stock Gets To $385

by
January 4, 2016 9:44 am
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  • Tesla Motors Inc (NASDAQ: TSLA) shares have lost 18 percent in the last six months.
  • Global Equities’ Trip Chowdhry maintained an Overweight rating on the company, with a price target of $385.
  • Tesla’s total deliveries were impressive and it has a $4B backorder in in Model X, Chowdhry stated.

Tesla’s fundamentals are robust. Analyst Trip Chowdhry expects the company to be able to deliver 85,000 Auto Units, comprising of Model S and Model X in in FY2016. This is based on the company’s guidance of average per week production and deliveries of 1,600 to 1,800 Auto Units in the year.

Tesla reported total deliveries of 17,400 for 4Q2015, representing 78 percent y/y increase and 48 percent sequential growth. This comprised of 17,192 deliveries of Model S and 208 of Model X. The company manufactured 507 of Model X units, which was ahead of the Global Equities estimate of production between 300 – 350 units of Model X.

Tesla ended the quarter with a production rate of 238 of Model X’s per week. “Tesla has almost quadrupled its Model X production rate from 50 Model X's per week, at the start of December, to 238 Model X's per week at the end of December, which is very impressive,” Chowdhry wrote.

“We are impressed by Tesla's Model X production ramp-up and 4Q'2015 deliveries, even-though we were estimating 18,300,” the Global Equities report noted.

Chowdhry mentioned the catalysts for Tesla as:

  1. Preview of Model 3 in the last week of March 2016.
  2. Opening up of a portion of GigaFactory around the third week of April 2016
  3. Continued strength in the Model X production ramp
  4. $4B backorder in in Model X, with 33,000 reservations

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