As Tesla Inc (NASDAQ:TSLA) prepares to take on the semi-trucking market with an electric truck that has CEO Elon Musk setting out-of-this-world expectations. Investors, get ready for Musk’s empire to “blow your mind clear out of your skull and into an alternate dimension.” Yet, do Musk’s lofty assurances have a place in reality? Let’s take a closer look at what the rest of the Street is saying about the electric car giant’s first dabble in the semis world:
RBC Capital analyst Joseph Spak may still be sidelined on Musk’s legendary brand, but sees reason to become more confident from lesser maintenance expenses to improved fuel efficiency, even if battery life and charging challenges have yet to be resolved.
As such, the analyst maintains a Sector Perform rating while bumping up the price target to $340, which represents a close to 11% increase from current levels. (To watch Spak’s track record, click here)
In a preview for tomorrow’s debut, Spak anticipates the market ought to glance ahead to the following: “1) Range. The Cummins (CMI) e-Truck posted a 100mi range and Daimler’s 220mi. Given our experience with Tesla on light vehicles, we believe/expect them to best those numbers (compare initial Model S vs. initial Nissan Leaf). We believe our 600mi range analysis above could work, though it is possible that Tesla unveils a truck with a range of 300-400 miles. This would further tip the economic equation in an e-Truck’s favor but limited the tractor’s use case. This is why in some sense (along with infrastructure), buses, short haul or urban delivery trucks is a more logical first application. 2) Cost. Highly dependent on range.”
In a bullish corner, Baird analyst Ben Kallo approaches with enthusiastic conviction on Tesla, especially on back of his Industrial Conference.
For Tesla, Kallo advises investors to view all setbacks as short-term and any pullbacks as enticing opportunities to buy into the stock, emphasizing, “We left our conference more confident TSLA will ramp the Model 3 to 5k vehicles per week without needing to raise capital. TSLA is making the necessary changes to solve the bottlenecks at the gigafactory, while also burst testing other production processes to identify any potential problems and to help ensure a smooth ramp. We believe the production challenges will be temporary, and view recent weakness as a buying opportunity.”
In reaction, the analyst maintains an Outperform rating on TSLA stock with a price target of $411, which implies a just under 34% upside from where the stock is currently trading. (To watch Kallo’s track record, click here)
Wall Street wants to play it safe when it comes to this empire of the tech world, as TipRanks analytics demonstrate TSLA as a Hold. Based on 21 analysts polled by TipRanks in the last 3 months, 5 rate a Buy on Tesla stock, 8 maintain a Hold, while 8 issue a Sell on the stock. The 12-month average price target stands at $320.27, marking a nearly 4% upside from where the stock is currently trading.