Last night after the market closed Tesla disclosed that the German Federal Motor Transport Authority (KRAFTFAHRT-BUNDESAMT) cleared Tesla of manufacturer-related defects in the three fires in recent months. “Therefore, no further measures under the German Product Safety Act [Produktsicherheitsgesetz (ProdSG)] are deemed necessary.”
The assumption on Wall Street is that if the German Motor Transport Authority cleared Tesla, so would the NHTSA. German automotive standards are generally considered more stringent (and efficient) than that of the US.
Analysts jumped on the news and dialed the stock up. The market responded with a 20 point gain after opening up 6 points and steady growth throughout the day.
Analyst’s words follow:
Morgan Stanley calls Tesla’s plunge a buying opportunity Analysts at Jefferies and Morgan Stanley weighed in on Tesla Motors Inc. Morgan Stanley analyst Adam Jonas listed Tesla as his top pick out of the 26 different companies his firm follows in the U.S. auto industry. Jonas said although the slide after the three Model S fires may have been justified, he expected shares to bounce back because the automaker’s long-term trajectory was still intact. He said the fires shouldn’t cause any “material damage” to Tesla’s business and that they would buy shares.
The analyst has a $153 per share price target on Tesla Motors Inc. He said at the automaker’s highest point, it was “due for a big correction” because there was “little or no valuation support on near-term expectations.” Jonas reiterated his Overweight rating on the automaker.
Jefferies weighs in on Germany news Analysts at Jefferies issued their report after Tesla Motors Inc revealed last night that German regulators ruled not to issue a recall on the Model S after their investigation into the three fires. Jefferies analyst Elaine Kwei reiterated her Buy rating on the automaker, although she did lower her price target to $190 from $210 per share….MORE