Tesla Motors Inc
In a research report issued today, Sterne Agee analyst Rob Cihra initiated coverage on shares of Tesla Motors Inc (NASDAQ:TSLA), with a Buy rating and price target of $300, which implies an upside of 37% from current levels.
Cihra wrote, “TSLA is controversial, expensive and risky, but we think that is the price for nearly open-ended growth in a technology innovator targeting trillion dollar auto and energy markets, where fundamental disruption is taking place in 1) electrification, 2) software/ autonomous driving and 3) on-demand transport.” Furthermore, “We forecast revenue <$9B in 2016E but growing to $32B by 2019E, as Tesla’s premium Model S sedan and X SUV are joined by its $35K Model 3, projected to launch late-2017 (we target early-2018). Heavy upfront spending keeps 2016E EPS <$1 but we forecast leverage to >$10 by 2018E and >$17 in 2019E.”
“Pioneering EVs, Tesla has core strengths in electrical, mechanical and software engineering, and a visionary CEO. It is taking a clean slate approach to the auto market and building a “cool” aspirational brand. Its Li-ion battery pack still accounts for >20% of vehicle COGS but Tesla has reduced cost to <$190kWh and we see <$100kWh doable by 2020E with scale. So we value TSLA for its 2019E+ opportunity, recognizing interim swings could trade it from point A down to point B (e.g., stock has shown high correlation to oil prices) but ultimately to a much higher point C,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Rob Cihra has a yearly average return of 7.7% and a 51% success rate. Cihra is ranked #656 out of 3986 analysts.
Out of the 25 analysts polled by TipRanks, 14 rate Tesla Motors stock a Buy, 4 rate the stock a Hold and 7 recommend a Sell. With a return potential of 28%, the stock’s consensus target price stands at $280.46.
Goldman Sachs analyst Simona Jankowski reiterated a Buy rating on shares of Apple Inc. (NASDAQ:AAPL), while reducing the price target to $124 (from $136), to reflect lower growth expectations for the smartphone industry and increasing risks in the Chinese business. The new price target represents a potential upside of 26% from where the stock is currently trading.
Jankowski wrote, “We are trimming our Apple estimates to reflect lower growth expectations for the smartphone industry, following recent reduction of our global smartphone unit growth forecast for 2016/17 to 5%/4% from 6%/7%. We also fine-tune our iPhone forecasts by introducing a detailed regional build, updating our installed base model, and adding an inventory overlay. Even with these assumptions, which we view as conservative, our model implies upside to consensus estimates, and we maintain our Buy rating.”
The analyst continued, “Our reductions are driven by lower market growth, as well as lower ASPs on a greater shift from developed to emerging markets, which we expect will drive a higher mix of the lower-priced iPhone SE (and its successors) relative to the higher-priced iPhone 7 (and its successors). That said, we continue to view consensus estimates for FY17 as too low, as we expect an increase in upgrades with the iPhone 7 based on the pent-up demand evident in our recent US consumer survey, combined with our estimate of 26% yoy growth in the iPhone installed base as of September 2016.”
According to TipRanks.com, analyst Simona Jankowski has a yearly average return of 9.2% and a 58% success rate. Jankowski has a -5% average return when recommending AAPL, and is ranked #362 out of 3986 analysts.