Pacific Crest and Canaccord analysts weighed in with a neutral stance on the electric automotive giant Tesla Motors Inc (NASDAQ:TSLA) and semiconductor giant Advanced Micro Devices, Inc. (NASDAQ:AMD).
Tesla Motors Inc
In a research report released yesterday, Pacific Crest analyst Brad Erickson reiterated a a Sector Weight rating on shares of Tesla Motors, with a fair value of $293, which represents a potential upside of 32% from where the stock is currently trading.
Erickson wrote, “Our checks with U.S. sales centers indicate that X reservations have been few and far between since its launch. Further, we estimate roughly half of the current 30,000 Model X reservation holders already own the Model S. We think test-drive-ready Model X cars are critical to improve awareness and demand for first-time Tesla buyers, and believe it’s unlikely to see these before year-end.”
Furthermore, “Recent management commentary and our checks suggest the Model S is getting multiple demand tailwinds right now from both those that were waiting to see the X launched and have since ordered an S, and those that have now canceled their X reservation and ordered an S. Amid this higher demand for the S, our checks found that lead times were unchanged (and relatively short, less than two months), which is generally good and implies higher production and deliveries in Q4. Based on our Q4 estimates, which assume Tesla increases overall production 40% q/q, Model S production needs to rise roughly 22% q/q and the company needs to deliver 2,500 Model X cars.”
The analyst concluded, “We continue to believe in Tesla as the leading innovator in the automotive space; however, expectations are still high even as sentiment has declined and the soft start to Model X reservations causes us concern. We could see getting more constructive in the early part of 2016 with solid execution, an improving gross margin story and Model 3 and Gigafactory as potential major catalysts, but believe we may need to get through these first few quarters of Model X ramping up before fundamentals can start to show enough improvement to warrant a higher valuation.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brad Erickson has a total average return of -4.1% and a 50.0% success rate. Erickson has a 11% average return when recommending TSLA, and is ranked #3054 out of 3779 analysts.
Advanced Micro Devices, Inc.
In a research report released today, Canaccord analyst Matt Ramsay reiterated a Hold rating on AMD stock, with a $2 price target, after the company delivered mixed third-quarter results, beating on revenue expectations but falling short of expectations.
Ramsay wrote, “Overall, we believe AMD’s diversification strategy continues to show gradual progress and a refreshed roadmap could position the company for more defensible long-term sales beginning in earnest in 2H/16 as the roadmap moves onto FinFET nodes. While Q3/15 results marked the first simultaneous Q/Q growth in both businesses in several years, revenue still declined ~25% Y/Y and another restructuring is just underway to properly size the cost structure. Finally, while AMD’s engineering teams continue to introduce well-architected APU and GPU products, competitors Intel and NVIDIA maintain foundry and scale advantages. Despite believing in the leadership under AMD’s new CEO Lisa Su, we wait for tangible signs of multi-quarter business stability and new FinFET products before becoming more constructive.”
According to TipRanks, analyst Matt Ramsay has a total average return of -3% and a 48.4% success rate. Ramsay has a -33.1% average return when recommending AMD, and is ranked #3259 out of 3779 analysts.
Out of the 12 analysts polled by TipRanks, 1 rate Advanced Micro Devices stock a Buy, 7 rate the stock a Hold and 4 recommend a Sell. With a return potential of 7.11%, the stock’s consensus target price stands at $2.11.