There has been a lot of buzz on Wall Street in regards to Tesla Motors, Inc. (NASDAQ:TSLA) and Twitter Inc (NASDAQ:TWTR) as both companies are working on pipeline products that could increase future revenue. Below are the latest analyst insights on each stock.
Tesla Motors, Inc.
Shares of electric car company Tesla Motors, Inc. have jumped almost 5% in pre-market trading after Morgan Stanley analyst Adam Jonas increased his price target on the stock by 66% from $280 to $465 while maintaining an Overweight rating.
Jonas bases his bullish rating on his confidence in “Tesla Mobility, an app-based, on-demand mobility service.” The analyst believes Tesla is well-positioned to obtain a large market share in the race to self-driving cars, citing “Given the pace of technological development both within Tesla and at rival technology and mobility companies, we would be surprised if Tesla did not share formalized business plans on shared mobility within the next 12 to 18 months.”
Jonas believes that if Tesla starts “selling miles in addition to selling cars,” the company’s potential revenue could more than triple by 2029. Furthermore, “If Tesla wants to make good on its mission to accelerate the world’s transition to sustainable transport, we see the move to a shared mobility model as critical.”
Overall, Adam Jonas has a 58% success rate recommending stocks and a +18.9% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated Tesla 32 times total, earning a 74% success rate recommending the company and a +42.0% average return per recommendation.
Conversely, S&P Capital analyst Efraim Levy maintained a Sell rating on Tesla on August 13 after the company announced a secondary offering of 2.1 million shares of common stock. The analyst believes “Tesla’s plan to issue 2.1 million shares for net proceeds of about $500 million (before overallotments), combined with existing credit lines, will provide the company with more than enough cash for operational purposes into 2016. It also shows the power of an expensive stock to make funding relatively cheap, as we see only 1.6% dilution from the base offering.”
On average, Efraim Levy has a 65% success rate recommending stocks and a +11.7% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated Tesla 6 times total, earning a 20% success rate recommending the company and -7.8% average loss per recommendation.
Out of 14 analysts polled by TipRanks within the past 3 months, 6 analysts are bullish on Tesla, 3 are neutral, and 5 are bearish. The average 12-month price target on Tesla is $294, marking a 20.91% potential upside from where the stock last closed.
Social media giant Twitter Inc has been on quite a roller coaster in the first half of 2015, ultimately having fallen almost 19% year-to-date.
Many investors blame Twitter’s decline on former CEO Dick Costolo, who officially stepped down from the position on July 1 of this year. Investors held Costolo responsible for Twitter’s ongoing deceleration of user growth and lack of innovations on its platform.
Twitter co-founder Jack Dorsey was named interim CEO until the board brings on a new replacement. Dorsey is also the CEO of Square, a mobile credit card payment company. With that said, SunTrust analyst Robert Peck believes that Twitter will announce a new permanent CEO as early as next week and believes it will be Jack Dorsey.
The analyst noted, “We think the company is likely to announce a Triumvirate of leadership, with: Jack Dorsey as CEO, Adam Bain as COO / President, and Ev Williams with more board influence (perhaps Chairman).” Since Dorsey is also still the CEO of Square, Peck believes it “is unclear how institutional investors will react to a permanent CEO who is also the CEO of a pre-IPO company.” Despite “the complexity of Twitter’s turnaround and product road map,” Peck believes “this Triumvirate structure may be the best solution.”
As such, Robert Peck reiterated a Neutral rating on Twitter on August 14, commenting, “We would look for the company to put more expertise on the board in media, technology, and operations. We think active involvement by these directors is critical to shaping Twitter’s future.”
Overall, Robert Peck has a 61% success rate recommending stocks and a +11.4% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated Twitter 35 times since 2014, earning a 94% success rate recommending the company and a +40.8% average return per recommendation.
On the other hand, Jefferies analyst Brian Fitzgerald reiterated his bullish stance on Twitter on August 13, citing the potential for the company to scale its video applications, Vine and Periscope. Twitter acquired Periscope in March of this year for $100 million. Fitzgerald believes Twitter can use Periscope and Vine to its benefit because online video ads have the potential to generate more than $17 billion on an annual basis by 2017 in the United States.
On average, Brian Fitzgerald has a 54% success rate recommending stocks and a +15.0% average return per recommendation when measured over a one-year horizon and no benchmark. The analyst has rated Twitter 5 times this year with no success and a -22.1% average loss per recommendation.
Out of 26 analysts polled by TipRanks, 11 analysts are bullish on Twitter and 15 are neutral. The average 12-month price target on Twitter is $41.95, marking a 44.36% potential upside from where the stock last closed. On average, the all-analyst consensus for Twitter is Hold.