These are exciting days for shareholders of electric car giant Tesla Motors Inc (NASDAQ:TSLA) and tech giant Apple Inc. (NASDAQ:AAPL), as the highly anticipated Tesla Model 3 was unveiled, while Apple began selling the new iPhone SE around the world. That said, analysts are not wasting a minute as they are eager to weigh in on two of the most popular stocks. Let’s take a closer look.
Tesla Motors Inc
Shares of Tesla are up nearly 7% in pre-market trading Friday, after the company finally took the wraps off of the Tesla Model 3 at a special event in California yesterday. In reaction, Stifel Nicolaus analyst James Albertine reiterated a Buy rating on the stock, with a price target of $325, which represents a potential upside of 41% from where the stock is currently trading.
Albertine observed, “We are simply awestruck by the demand surfacing for the Model 3. While we have disagreed with traditional OEMs (comments circa 2008/09) and various investors (comments circa 2012-16) both of whom have questioned whether “demand exists” for electric vehicles, we had no idea the reservation orders would be this strong for the Model 3. We are actually disappointed, having been at various Tesla store locations yesterday, that we chose to wait for online ordering later in the evening.”
“However, as we attempt to shake off enthusiasm and hunker down to do some fundamental analysis, our focus shifts to production. We originally launched coverage of TSLA with a Hold rating as we saw considerable obstacles, both financial and physical, with respect to battery and vehicle production. While the Model 3 will harness learnings from the Model S and X production lines, it will ultimately require an entirely new, high volume, manufacturing line. We do not know at this point whether the vehicle will incorporate greater use of steel vs. aluminum, nor do we have a sense of expected battery pack costs at the time of production, which provides a foundation for our Model 3 gross margin expectations over time,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst James Albertine has a total average return of 6% and a 58% success rate. Albertine has a 4% average return when recommending TSLA, and is ranked #666 out of 3840 analysts.
Out of the 22 analysts polled by TipRanks, 11 rate Tesla Motors stock a Buy, 4 rate the stock a Hold and 7 recommend Sell. With a return potential of 12.1%, the stock’s consensus target price stands at $257.56.
Piper Jaffray analyst Gene Munster reiterated an Overweight rating on shares of Apple, with a price target of $172, after the company launched its iPhone SE, a smaller, cheaper device that will be sold alongside Apple’s iPhone 6s and 6s Plus models.
Munster commented, “While a few global stores had some queue formed based on media reports, the majority of Apple Stores did not have the typical long lines associated with a new product launch. Additionally, our check of 100 Apple Stores in the US show 90% availability for the iPhone SE. We view both the lack of lines and the high level of product availability as in line with expectations, reinforcing our view that the SE will be largely incremental to the model in replacing the low-end iPhone 5S. AAPL remains our top pick as we approach WWDC in June and the iPhone 7 launch in September.”
According to TipRanks.com, analyst Gene Munster has a total average return of 19% and a 64.5% success rate. Munster has a 22% average return when recommending AAPL, and is ranked #4 out of 3775 analysts.
Out of the 51 analysts polled by TipRanks, 39 rate Apple stock a Buy, 9 rate the stock a Hold and 3 recommend a Sell. With a return potential of 25%, the stock’s consensus target price stands at $136.60.