With Tesla Model 3 coming, Wall Street likes what it sees

Posted on March 21, 2016 by Matt Pressman

We recently reported on a Wall Street analyst who was very impressed with the Tesla Model X. With Tesla Motors [NASDAQ: TSLA] readying itself for the launch of the new Tesla Model 3, it appears multiple Wall Street analysts are enthusiastic about Tesla's ability to churn out the lower-priced sedan in volume. Just recently, a few analysts have weighed in on TSLA and their comments reflect a bullish outlook for the company. At market close this Friday, TSLA stock was up almost 40% in the past month.

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On Friday, Barrons reported that Bernstein’s Michael Parker said the Tesla Model 3 will be, "the mainstream addition to its electric vehicle fleet: faster, cleaner, more convenient, more reliable, better handling, more communicative… and – at $35,000 – now cheaper than a sizeable chunk of the products on the market that still run on gasoline." He explained that, "with a mid-priced addition to Tesla’s product mix, the company will no longer be competing just with the BMW 5-series and Audi A6. It will be competing with the Honda Accord and Toyota Camry."

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And, according to Barrons, Oppenheimer’s Colin Rusch says, "As the company [Tesla]  approaches the unveiling of the Model 3 two weeks from now, it is clearly progressing toward reaching production numbers of 1000 Model X’s/week and generating positive cash flow for the year. We believe those two operating metrics are critical benchmarks for the company as they progress toward sustainable growth… We remain bullish on shares given the recent update."

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Bloomberg reported that James Albertine, a Stifel analyst visited the Tesla factory and proclaimed, "In roughly one year since our last visit, the progress witnessed is truly stunning. Robotics systems are customized, production processes are revolutionary, and attention-to-detail/supply chain management is improving by the minute... We do not believe this production process is one competitors can easily recreate." 

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Bloomberg continued with some additional comments from other analysts including Credit Suisse's Dan Galves: "On the Model 3, management indicated that there is a clear focus on ease of build, on-time launch, and cost."  And, after a Tesla factory tour in Fremont, Baird's Ben Kallo came back convinced that battery costs are already just half the industry average and are falling more quickly than most estimates. "This should allow Tesla to produce the Model 3 with healthy margins, and to invest in vehicle aesthetics and performance, placing it above competing vehicles."

Posted in Electric Vehicles, Tesla, Tesla Model 3, tesla model s, Tesla Model X, TSLA



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