To no surprise, the stock market loves Tesla Inc. (NASDAQ:$TSLA).
When asked about the California-based company, Jim Cramer, TheStreet’s founder and Action Alerts PLUS Portfolio Manager, said “if you view it as a technology company, it’s going to go higher. If you view it as a short, you’re going to get run over.” He noted that most people hate Tesla’s financials, but love its vehicles and are itching to own the stock.
The majority of Wall Street agrees.
According to Brad Erickson, Pacific Crest analyst, the sales predictions for Tesla’s Model 3 vehicle are too low given likely high consumer interest. “If the car is perceived as awesome, already low second half 2017 buy-side expectations will actually fall.” He added, “under this scenario, we believe downside risk from significant production shortfall would likely be minimal.”
On June 7, Tesla’s afternoon trading price was $357. Erikson now has a $439 price target on Tesla, which suggests a 23% advance from Wednesday’s trading price. It’s important to note that Erikson has warned the public that high-end consumer demand for Tesla’s vehicles are leveling off and the overall profitability is very likely to “underwhelm.”
As of right now, Tesla will start to deliver the Model 3 vehicle to customers on July 1. Before the end of 2017, Tesla plans to send out 5,000 Model 3’s per week and if all goes as planned, 10,000 per week in 2018.
With the expectations that the Model 3 vehicle will have a strong debut, Tesla shares have increased more than 67% so far in 2017.
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