Why Tesla Isn’t among Analysts’ Top 5 Auto Companies
Analysts are divided on Tesla
According to data compiled by Reuters as of September 25, 2017, about 35.0% of analysts covering Tesla Motors (TSLA) have given the stock a “buy” recommendation. Another 35.0% have recommended a “hold,” and the remaining 30.0% have rated it a “sell.”
These stock recommendations are based on the consensus of 23 Wall Street analysts currently covering Tesla stock.
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Since Tesla began, Wall Street analysts have been divided on Tesla. However, Tesla stock has proved many analysts wrong on many occasions in the past by delivering phenomenal returns. The company’s CEO (chief executive officer) Elon Musk has the vision to accelerate sustainable transportation, and that seems to be driving TSLA stock.
As of September 25, 2017, Tesla’s 12-month consensus target price was $319.94, which was already 7.3% lower than its market price of $344.95.
Tesla stock has witnessed a value erosion of 4.6% so far in 3Q17. Despite the quarter-to-date loss, its stock has risen 61.4% YTD (year-to-date).
With these solid YTD gains, Tesla has become the most valuable US automaker by market cap (capitalization) on many occasions in 2017. As of September 25, 2017, Tesla had a market cap of ~$57.6 billion. That was slightly lower than General Motors (GM) but higher than Ford (F) and legacy motorcycle maker Harley-Davidson (HOG).
Focus on Model 3 and semi-truck launch
A lot has been said about how Tesla’s Model 3 could prove to be a game changer for the company. Tesla is expected to begin delivering its Model 3 to non-employee customers in 4Q17. Timely deliveries of Model 3, which requires a huge production ramp-up, will be critical in determining Tesla’s future growth. Its semi truck launch event is expected to take place on October 26, 2017. In 4Q17, investors could remain focused on developments related to the Model 3 and the semi truck.
In the next part, we’ll see what analysts are recommending for Ford stock at the end of 3Q17.