What To Expect Now That Tesla Shareholders Have Approved A SolarCity Merger
In a research report on Friday, Ben Kallo of Baird reiterated an Outperform rating on Tesla's stock with an unchanged $338 price target, even though the acquisition was controversial.
According to Kallo, Tesla could benefit from the acquisition given the growth opportunities in solar roofs and the ability to offer a complete energy system to consumers. As such, the acquisition approval removes an overhang and should allow investors to look forward to Tesla's next chapter of growth.
Kallo continued that Tesla's CEO Elon Musk touted the company's ability to improve on inefficiencies in the traditional roofing supply chain and could actually offer consumers a cheaper alternative to a traditional roof.
Politics And Noise
Kallo also highlighted Musk's comments that Tesla will remain in a strong competitive position regardless of any unfavorable policies that President-elect Donald Trump would implement.
"We expect the stock will move higher after noise around the SCTY
acquisition subside," the analyst concluded. "In our opinion, investor focus will return to the ramp of the Gigafactory, Model S and X production, and the ramp of the Model 3 production, and we believe shares will move higher with execution."
At Last Check
- SolarCity was up 0.15 percent at $20.43.
- Tesla was down 1.16 percent at $186.47.
Latest Ratings for SCTY
|Nov 2016||Axiom Capital||Downgrades||Hold||Sell|
|Oct 2016||Axiom Capital||Upgrades||Sell||Hold|
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.