Oppenheimer analyst Colin Rusch is out today with a research note on shares of Tesla (NASDAQ:TSLA), after attending Bull and Bear meetings, which signaled relatively consistent views on numerous key issues facing the electric car giant, such as production volumes, need for additional capital, and value of ADAS solution.
“Differences boiled down to two key variables: the ability of TSLA to reach Model 3 GM targets and depth of demand for Model 3,” Rusch noted “We expect Model GM trajectory to be the best indicator of TSLA shares over the next several quarters as investors look for indications of sustainably reaching mid-20s GM on those vehicles. Over the medium term we believe Model 3 demand will drive shares. Consensus was that if TSLA is not able to sell ~500K Model 3s per year, shares are likely to come under pressure.”
The analyst continued, “GM appears to be the most important variable for both bulls and bears over the next year given the bull thesis roots in the belief that TSLA can generate significant cash flow once it reaches higher production volumes. That potential is dependent on company-wide manufacturing margins in the mid-20s. Progress toward that goal likely dictates trading.”
Net net, Rusch reiterates a Perform rating on Tesla shares, without suggesting a price target.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Colin Rusch has a yearly average return of 16.1% and a 50% success rate. Rusch has a 96% average return when recommending TSLA, and is ranked #347 out of 4830 analysts.
TipRanks indicates Wall Street is evenly split between a battle of bulls vs. bears on Musk’s electric empire. Out of 24 analysts polled in the last 3 months, 7 are bullish on Tesla stock, 10 remain sidelined, while 7 are bearish on the stock. Consider that the 12-month average price target stands at 302.67, analysts apparently see a 16.5% downside from where the stock is currently trading.