Deutsche Bank AG (FRA:DBK) has maintained their Buy rating for Tesla Motors Inc (NASDAQ:TSLA) and increased the price target to $200 from $160. Deutsche Bank’s Dan Galves cited progress on Tesla’s margins and strong demand.
“Based on conversations with mgmt and monitoring information available on Tesla owners? blogs, we believe that the company is on-track to modestly outperform Q3 margin expectations, that demand has continued to grow in the US and Europe (despite substantial option pricing increases in effect as of late July), and that the production rate at Tesla’s factory has continued to increase,” said Galves.
Galves added: “As Tesla continues to execute to margin targets and demonstrate strong demand for their product, confidence in the late-decade volume, margin, and earnings estimates that justify upside to the current valuation will likely grow. We believe that this, along with still-high short interest (~22% of Free Float; ~18MM shares, ex convert hedging), provides a good set-up through at least the end of 2013. With better visibility on the metrics that the Street is focused on (margin and demand), we see limited potential for negative catalysts in the near term.”