Posted on January 04, 2017 by Matt Pressman
Tesla just announced an impressive 64% year-over-year increase in vehicle production to close out 2016. Looking ahead, 2017 should be a pivotal year for Tesla. But could Tesla be the top stock pick for the year ahead? As reported in Street Insider*, Wall Street analyst Ben Kallo of Baird & Company thinks so — he named, "Tesla Motors (NASDAQ: TSLA) his top pick for 2017 and reiterated an Outperform rating and price target of $338." Kallo explains in a research note: "We think the ramp of Tesla Energy and Model 3 production could exceed expectations during 2017, and believe the opportunity is not currently reflected in share prices."
Above: Tesla Model S (Instagram: rcnfive)
Another factor not being currently priced into Tesla's stock is its budding energy storage business and inherent advantages in battery production. Kallo elaborates, "We believe TSLA battery sales are accelerating, and we should see additional benefits from the battery production ramp coinciding with the launch of the Model 3. We recommend accumulating shares ahead of additional details being released about TSLA’s current battery costs and density metrics."
Above: Tesla's partner Panasonic already leads the battery supplier market with nearly 1/3 of all installed capacity (Source: InsideEVs)
Furthermore, Street Insider reports that: "Powerwall 2 provides a competitive pricing advantage per kWh, and should allow TSLA to continue to gain market share for homes and small businesses... [and Baird] recommends buying shares heading into 2017 as they believe the stock will make new highs." Kallo's proclamation caused a stir on Wall Street. Check out what the pundits on CNBC said about Kallo's top pick for 2017...
Above: CNBC debates Tesla as 2017's top stock pick (Youtube: Money Views via CNBC)
And if you're already holding TSLA stock, Motley Fool's Daniel Sparks named TSLA one of the "three stocks I won't be selling in 2017... [because] selling before the automaker launches its lower-cost Model 3, which ultimately represents the realization of the company's 'master plan' laid out over 10 years ago, could be a mistake. While the stock's valuation has undoubtedly already priced in expectations for extraordinary growth, 400,000 deposit-backed reservations for the highly anticipated vehicle preview a potential major tipping point toward electric vehicles — and Tesla would be at the center of this critical shift."
*Source: Street Insider