TSLA Stock Upgraded to ‘Buy’
Sentiment towards Tesla (TSLA) stock remains bullish heading into Wednesday’s trading session. The name is higher by more than 5 points to $209.74 in pre-market hours following a report by Goldman Sachs’ (GS) Patrick Archambault.
Investor expectations “seem more grounded” with Tesla shares down 23% since the unveiling of the Model 3, writes Archambault, arguing that the stock’s current valuation does not fully capture Tesla’s “disruptive potential.” The analyst says he sees an attractive risk/reward ratio at current share levels, which is why he upgraded the electric carmarker to ‘Buy’ from ‘Neutral’. Archambault’s six-month price target for the stock remains unchanged at $250/shr.
It’s worth noting that in order for Tesla’s stock to justify its current valuation or higher – based on FY 2017 current estimates of $3.28, Tesla trades with a P/E well over 60 – it needs to keep providing the Street with psychologically positive medium and the expectation of long-term sustainable and rapid growth. The company’s current year and next year EPS growth estimates stand at 129.10% and 389.60%, respectively. TSLA has a t-12 price-to-sales ratio of 6.56. EPS for the same period registers at ($7.83).
The $27.41 billion Palo Alto, California-based company has a median Street price target of $260.50 with a high target of $500. Tesla Motors is down 17.72% year-over-year, compared with a 3.70% loss in the S&P 500.
Tesla has seen its stock advance more 965 percent since its June 2010 initial public offering.