As the peak of earnings season continues, analysts are weighing in on the electric automotive giant Tesla Motors Inc (NASDAQ:TSLA) and dietary supplements giant Herbalife Ltd. (NYSE:HLF), with positive ratings and views.
Tesla Motors Inc
Tesla shares are climbing nearly 12% following the release of mixed third-quarter results. The company reported non-GAAP EPS of $0.58, compared to the Street consensus estimate at $0.60. However, while the company announced a wider-than-expected loss for the quarter, the company also said it was boosting car production.
Oppenheimer analyst Colin Rusch noted, “As TSLA guided to hitting 2015 production targets and reiterated its average production rate of 1,600-1,800 vehicles/week in 2016, we believe investor skepticism on production ramp is being unwound. While the complexity of its manufacturing is substantial, we note the similarity of Model S and Model X platforms aids the company’s learning curve. We continue to take a conservative view on ramp with our new estimates at 77K vehicles for 2016 still below the implied target of 80K-90K. We believe hiring of new CFO Jason Wheeler, a Google vet, points to the company evolving toward the opportunity presented by software and service revenue related to transportation and power management. We expect shares to continue momentum higher as TSLA executes on its ramp.”
Rusch reiterated an Outperform rating on Tesla Motors shares, with a price target of $340, which represents a potential upside of 48% from where the stock is currently trading.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Colin Rusch has a total average return of 15.9% and a 50% success rate. Rusch has a 121.1% average return when recommending TSLA, and is ranked #273 out of 3824 analysts.
Herbalife released its Q3 earnings report yesterday. The company posted $1.1 billion in revenue and $1.28 EPS, despite marketing changes and a 24% increase in Chinese sales. The nutrition supplement giant’s sales in Europe also rose 10%, although overall volume for the company decreased 3% worldwide from the same quarter of last year. Despite this decrease, analysts remain hopeful that Herbalife will recoup its losses next quarter.
Following the company’s earnings report, analyst Scott Van Winkle of Canaccord maintained a Buy rating on the stock and increased his price target from $58 to $61. He believes the recent decrease in revenue and sales stems from currency fluctuations in the last year, especially in the company’s Chinese and Asia Pacific sectors where sales declined 4.5% compared to Van Winkle’s forecast. The strengthening of the US Dollar was also a major factor that impacted sales, especially in Mexico. Taking these fluctuations into consideration, Van Winkle lowered his Q4 sales growth, specifically in China.
The analyst concludes, “We continue to believe that volume growth returns in Q4 and that China growth persists at a robust level. We still believe that the valuation discounts a regulatory challenge that we believe will be manageable.”
According to TipRanks, Van Winkle has rated Herbalife’s stock 23 times since 2011. Based on these ratings, his success rate for the stock is 57% with an average return of 11% per Herbalife rating. Out of 3 analysts polled by TipRanks who have recently rated Herbalife’s stock, all 3 rated it as Buy. The average 12-month price target is $72.00, marking a 26.6% average return per rating based on the stock’s current levels.