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Analyst Recommendations for Tesla Stock ahead of 2Q16 Earnings

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Analyst recommendations

According to Bloomberg, 35% of analysts covering Tesla Motors (TSLA) have given the stock “‘buy” recommendations, while 40% have recommended a “hold.”

Five of the 20 analysts expect Tesla stock to remain weak and have given it “sell” recommendations.

Analysts are probably divided on Tesla stock primarily over the company’s ability to deliver its Model 3 on time and its production constraints.

We should note here that investors should pay attention to analyst recommendations since they can affect a company’s stock price movement. If a popular analyst changes his or her view, a significant short-term movement in the stock could follow.

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Target prices

As of July 26, 2016, Tesla’s consensus 12-month target price was $259. It had an upside potential of just 12.8% from its closing Market price of $229.51.

Among the popular analysts, Adam Jonas of Morgan Stanley has revised the target price for Tesla. However, it’s still the highest price target of $245. That represents a 7.7% upside potential over the closing price on July 26.

However, Ryan Brinkman of J.P. Morgan, Brian Johnson of Barclays, and Colin Langan of UBS expect Tesla to underperform the broader market. They’ve maintained low target prices of $185, $165, and $160, respectively.

Previously, in 2014 and 2015, the most notable analysts were positive about Tesla, probably because the company exceeded its Market expectations in 2013 on many occasions. This performance also showcased the growth potential of the electric vehicle market.

Recommendations for mainstream automakers

Below are Wall Street analysts’ consensus “buy” recommendations for other automakers (VCR) with expected 12-month stock price movements as of July 26, 2016.

  • Ford Motor (F): 33.3% of analysts, with a 4.4% upside potential
  • Fiat Chrysler Automobiles (FCAU): 44.8% of analysts, with a 21% upside potential
  • General Motors (GM): 40.9% of analysts, with a 14.7% upside potential
  • Ferrari (RACE): 56.3% of analysts, with an 11.6% upside potential

Next, we’ll see what analysts are estimating for Tesla’s 2Q16 revenues.

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