Dougherty & Co Defends Tesla, Sees 92% Upside From Here

  • Tesla Motors Inc TSLA shares have plunged 27 percent since January 4.
  • Dougherty & Co’s Andrea James maintained a Buy rating for the company, with a price target of $355.
  • Tesla could “set a positive tone” for its full-year performance, and 2016 profitability could be a catalyst for its stock, James stated.

“We like TSLA shares below $200 and believe they should be bought,” analyst Andrea James wrote. Tesla delivered 17,400 units in Q4, in line with its guidance. Model S recorded 17,192 units, while 208 were Model X. The company is scheduled to report its Q4 results on February 10.

Related Link: Tesla Warning? Estimates Cut En Masse At This Wall Street Firm, Next Catalyst Seen As Two Months Away

James expects Tesla to report adj. EPS and revenue of $0.06 and $1.73 billion, respectively. She expects the company to guide to adj. EPS and revenue of $1.23 and $8.5 billion for 2016.

“Model X remains production constrained. Tesla has been prioritizing quality above all else, ramping exponentially…Tesla has not been marketing the Model X or making an effort to drive new orders. Tesla is working to put more cars on the road, convert reservations to orders, and provide test drives for those who want them,” the analyst wrote.

Tesla guided to being net cash flow to positive in 2016. The company is scheduled to commence battery cell production at the Gigafactory in Nevada. Moreover, Tesla plans to unveil its third-gen vehicle, Model 3, in late March, and may begin taking orders.

“We believe that Tesla just needs to do what it says it is going to do, and the stock can work in 2016,” the Dougherty & Co report noted. James commented that Tesla is likely to “set a positive tone” for the full year during its earnings call on February 10, and profitability in 2016 “should be a catalyst for the stock, as it was in 2013.”

Price Target
Posted In: Analyst ColorLong IdeasReiterationAnalyst RatingsTrading IdeasAndrea JamesDougherty & Co