Analyst Makes Even Greater Bullish Case for Tesla, With Some Risks

By Jon C. Ogg Updated Jan 12, 11:19AM EST · Published Jun 6, 10:15AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Analyst Makes Even Greater Bullish Case for Tesla, With Some Risks — © Thinkstock

Tesla Inc. (NASDAQ: TSLA) stock has been on fire in 2017. It has risen over 62% since the end of 2016, ahead of the Model 3 launch due this summer. Now one analyst is issuing an even more aggressive “bull case” for Tesla.

Pacific Crest, which just downgraded Apple this week, has now hiked its bull case price target to $439 from a prior $371.

Tesla is no longer just an electric car company now that it has amalgamated the SolarCity operations with its own battery storage efforts. That being said, Tesla’s market cap of $57 billion is about 10% higher than that of General Motors and is more than 25% higher than that of Ford.

If Pacific Crest is proven to be correct, that represents another 26% gain ahead. The report from the firm’s Brad Erickson and Elliot Arnson said:

We are raising our bull case to $439 and believe this is actively in play with Model 3 launching next month. Model 3 expectations are low and may head lower. Perception is reality, and we expect the perception to be positive. … Fundamentals and profitability may be largely ignored until 2018.

[nativounit]

While the $439 bullish case sounds rather robust, the team here did note that, over the longer-term, optimism in Tesla is likely to become more muted after investors begin to start judging the company for demand and growth and on its profitability.

As a reminder, short sellers have been rather aggressive in Tesla shares over time. That being said, the short interest has been somewhat stable between 31 million and 32 million shares in recent reporting periods. The days to cover ratio has mostly been between four and six days.

There has been some mixed news around Tesla this week as well. One key issue is that the cost of owning a Tesla is rising from the insurance and repair costs, even as Tesla made the biggest jump among the top 10 carmakers in a recent study. Toyota also recently unloaded its stake in Tesla.

Tesla shares were up another 1.1% at $351.30 on Tuesday morning, in a 52-week range of $178.19 to $351.50 and with a consensus analyst price target (from Thomson Reuters) of $269.56.

[wallst_email_signup]

About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. a673b.bigscoots-temp.com.