Tesla’s stock (TSLA) gained in pre-trading this morning after an analyst issued a new note warning short sellers that the Model 3 production ramp is not a good time to bet against Tesla. 

In the note, Baird Equity Research’s Ben Kallo raised his price target on Tesla from $368 to $411 – reiterating that the TSLA is one of his “top pick of 2017” (via Marketwatch):

“In our our opinion, TSLA is not a good short headed into the Model 3 ramp as we continue to believe upcoming catalysts will drive shares higher, and TSLA remains a top pick for 2017.”

Kallo is not alone with this point of view. We recently reported on analysts changing their expectations on Model 3 deliveries over the past few weeks and it also led shorts to weaken their bets against Tesla.

But the Baird Equity analyst went a step further and suggested that “stock performance following Model 3 introduction could mirror that of which was seen for the Model S.”

The Model S early production ramp was in late 2012 and early 2013 when Tesla went from producing a few Roadsters per week to a few hundred Model S sedans per week. During that time, Tesla’s stock jumped from ~$30 to over $100 per share.

The biggest part of the stock price increase happened after Tesla announced its first profitable quarter – something the company is currently not guiding as its capital expenditures keep hitting new records to support its growth.

Kallo sees the good review from the Model 3 driving this growth further:

“Importantly, a positive reception to the Model 3 from early customers could significantly increase the value of the Tesla Brand and further accelerate demand,”

Tesla CEO Elon Musk recently said that Tesla Model 3 annual demand could surpass 700,000 units. Before the launch last month, he wasn’t guiding more than 500,000 units.

Ben Kallo is ranked #458 out of 4,618 analysts on Tip Ranks with a 58% success rate and an average return of 10.3%. Here’s his track record on Tesla’s stock:

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