Investors and Wall Street analysts are mostly happy with Tesla’s Model 3 event last night and the confirmation that over 150,000 reservations were placed in the last 24 hours – much more than some of the most optimistic predictions. The company’s stock (TSLA) surged about 10% in early trading before settling down to a 3% gain at ~$236 right after the opening bell.
Analyst Andrea James from Dougherty & Co was among the first to issue a new note with a price target increase to a street high of $500 per share (from $355).
James wrote in her note to clients this morning (via StreetInsider):
“At the end of his presentation, CEO Elon Musk did not drop the mic and walk away. But he could have because Tesla has changed the game again. In one day, Tesla generated at least 150,000+ reservations, representing an order book of $6bn in revenue, and generating $150mm in zero-cost capital from the $1,000 customer deposits. (Note that the 2010 IPO added $190mm to the balance sheet.) ”
“Over six years, we have extensively researched the entire Tesla ecosystem. We’ve spoken with vehicle electrification experts and representatives from Daimler, Nissan, Toyota, Honda and BMW. We’ve met with Tesla’s management, robotics suppliers, customers, sales reps, cell competitors to Panasonic, third-party suppliers with access to the factory floor, and even local bartenders who serve drinks to the workers at shift change. Our research supports this conclusion: Tesla is solving a different set of equations than the rest of the auto industry. The disruption story builds.”
Other catalysts are coming soon including 2016 Q1 delivery results in the next few days and the following earnings next month.
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