Tesla Inc (NASDAQ:TSLA) shares are back into the limelight — this time in a positive way — after investment firms Baird and Bernstein published bullish reports about the electric car maker.
Baird analyst Ben Kallo, who recently visited Tesla’s Gigafactory, said in his report that Tesla’s manufacturing capability should be a competitive advantage for the stock in the long term. The analyst thinks that Tesla’s Gigafactory enables the company to lower its costs through industrialization of battery pack assembly. Kallo reiterated his buy rating for Tesla shares and gave a price target of $411, which implies a major upside to the current trading levels. Kallo believes that Tesla’s fundamentals remain strong, despite the negative headlines about the company. He thinks Tesla is a “Fresh Pick” for shareholders. Kallo also noted that Tesla’s Model 3 production, additional factories, possible new products will propel the stock.
Bernstein’s analyst Toni Sacconaghi also said in his report that the massive decline in Tesla Inc (NASDAQ:TSLA) share value after Elon Musk’s take-private tweet was “too dramatic.” The analyst said that the current sentiment around Tesla stock looks “relatively favorable” for the next few weeks.” Sacconaghi expects Tesla stock to go around $370. The analyst thinks Tesla is on track to meet its Model 3 production guidance.
However, Tesla stock got a shock on Tuesday after a longtime Tesla bull Romit Shah downgraded the stock to “neutral” from “buy”. The analyst said that Tesla is “no Longer investable.” Shah also cut his price target for Tesla to $300 from $400, citing “erratic behavior” of CEO Elon Musk.”
But Shah’s rationale is based on the temporary problems Tesla is facing. He also thinks Tesla’s shares are not worth buying because of the frequent outbursts of Elon Musk during earnings calls. But we believe all of these factors are temporary, and personal to Elon Musk. Tesla’s fundamentals remain strong.
Tesla Inc (NASDAQ: TSLA) has also shown potential to meet its production targets. Last quarter, Tesla met its target of 5,000 Model 3 cars per week.
There is also a chance that Elon Musk will go on leave or simply depart the company in the near future, as suggested by several shareholders and analysts. Jim Cramer recently said that Tesla board should put Elon Musk on “medical leave”. This would, according to Cramer, be a “good thing” for the company.