Analyst Shines Light on Tesla’s (TSLA) Brake and Roll Test Suspension; Sees 21% Upside for the Stock


Investors hit the panic button and sold off Tesla (NASDAQ:TSLA) shares today, following the news that the electric car giant decided to skip the so-called “brake and roll” test for Model 3 production at its flagship Fremont factory. This news comes as a gut-punch to to the bulls, which are now worried about sustainability and speed bumps ahead on the Model 3 front.

GBH Insights analyst Daniel Ives commented, “With burst production front and center the worry is that “shortcuts” taken would not be sustainable and potentially could jeopardize production issues on the horizon although Tesla contends the brake and roll test was redundant. While the jury is still out on the news today and what the implications could be for Model 3 production quality and changes going forward, the knee jerk reaction from the Street’s perspective is clearly a concern that neutralizes some of the long awaited good news from reaching the key 5,000 per week goal.”

“While its been a bumpy few months for investors with much frustration around the Tesla story, we are starting to see some clear rays of sunshine as the trifecta of Model 3 production ramps, ASP increases on Model 3, and the chances of a capital raise event moving into the background has given investors a clearer green light to own shares at current levels as some of the dark clouds are starting to dissipate, although today’s news add more agita to the situation,” the analyst added.

Net net, Ives reiterates an Attractive rating on Tesla shares, with a price target of $375, which represents a potential upside of 21% from where the stock is currently trading. (To watch Ives’ track record, click here)

Out of the 21 analysts polled by TipRanks (in the past 3 months), 7 rate Tesla stock a Buy, 8 rate the stock a Hold and 6 recommend a Sell. With a downside potential of nearly 7%, the stock’s consensus target price stands at $297.36.

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