Analyst Reports/Targets

[InTheShadows]

As an analyst you are forbidden from trading stocks in the sector you cover. Even if you don't cover that specific stock, but it falls in your sector, you still can't trade it.

I would hate to have that job then. I don't see why you would spend the time analyzing something you are forbidden to do business (trade) in?

One of the reasons I trade solar stocks is because I feel like I am killing two birds with one stone since my work in the industry means I have to do less research to invest in companies that are publicly traded in the industry. I also feel it allows me to offer our customers the best products that are created by the best companies in the industry.

 

[FluxCap]

I would hate to have that job then. I don't see why you would spend the time analyzing something you are forbidden to do business (trade) in?

They do it because they are paid very, very well by their investment banks while they are working as analysts (and don't have to guess at their income), and then can take their connections and experience elsewhere to trade on them (such as private equity, pension funds, hedge funds, etc).

 

[bonnie]

Since Lovallo gas such a low price target does anyone know his position on the stock. With that low of a price target he should gave done money on the line for his massively short position?

I doubt he's shorted it personally, but when I saw his new report/price target I fired off a note to my ML advisor. I've been with them a long time, have a healthy portfolio, am charged zero fees, and if it wasn't for the advisor (as I told him in the note), I'd move 100% of my assets based on this report alone. It's sloppy work and begs the question of just how many ML clients are shorting this stock.

So I get home from work tonight and I have a personal note from a ML vice president saying he will look further into the TSLA analysis and get back to me. "And if in the meantime, you would like to chat on the phone, please feel free to call my direct number." I would be foolish to expect anything to change, but still it warms my heart to know that at least one person knows of my dissatisfaction.

 

[Andrew]

Morgan Stanley's explanation of $320 target: "Nikola's Revenge: Part 2"

My dad just forwarded this to me from his broker... Didn't see it posted here yet, so I thought I'd share. Thirty-three pages of pure TSLA/Tesla/Gigafactory/Solar geekiness! (Mods please feel free to merge wherever appropriate.)

Nikola’s Revenge - Part 2: Distributed Energy Liberator

Tesla's Gigafactory targets exceed our expectations in terms of both scale and implied cost per kWH. Our N. American Electric Utilities team sees major potential for a continued trend of distributed energy generation with potential benefits to Tesla.

Can Tesla Be an Energy Company? If the Battery Is Good Enough…

The scale of Tesla’s battery production, even for its own use as an auto manufacturer, thrusts the company into ‘key player’ status for grid storage. There are currently around 15 Lithium Ion battery deployments with >1MW of capacity in the US with the largest installation being 40MW. Tesla’s current Model S production (assuming 80 units per day with an 80kWh average battery capacity – ie. 80% of Model S’s delivered with 85 kWh packs, 20% with the 60kWh) is equivalent to 6.4 MW hours of battery capacity per day. At that rate, by our calculations Tesla’s Model S production could produce a combined vehicle population with as many MW of battery storage for the US grid as exists today (304 MW) including all chemistries in just 6 weeks.

The scale of Tesla’s battery production, even for its own use as an auto manufacturer, thrusts the company into ‘key player’ status for grid storage. There are currently around 15 Lithium Ion battery deployments with >1MW of capacity in the US with the largest installation being 40MW. Tesla’s current Model S production (assuming 80 units per day with an 80kWh average battery capacity – ie. 80% of Model S’s delivered with 85 kWh packs, 20% with the 60kWh) is equivalent to 6.4 MW hours of battery capacity per day. At that rate, by our calculations Tesla’s Model S production could produce a combined vehicle population with as many MW of battery storage for the US grid as exists today (304 MW) including all chemistries in just 6 weeks.

• 1 Tesla Model S (85 kWh) can store enough energy to power the average US household for 3.5 days.
• By 2020, we estimate Tesla’s 690k unit US fleet will contain the stored energy capacity to provide 1 full hour of electricity to 1.6% of US households.
• By 2028, we estimate Tesla’s 3.9m unit US fleet will contain the stored energy capacity to provide 1 hour of electricity to 8% of US households.
• By 2028, we estimate Tesla’s 7.2m unit global fleet will contain the stored energy capacity of 443 GW, an amount exceeding the entire daily electricity consumption of Mexico, or more than 50% than the Kingdom of Spain.

 

[FluxCap]

Wow, this is squeezeville now. I just read the AJ note. I'll provide a quote here:

 

[uselesslogin]

Wow, this is squeezeville now. I just read the AJ note. I'll provide a quote here:

Yeah, the market has not yet come to the realization that the Model S is the second worst car Tesla will ever make. At least when you account for price of course. (ie Model 3 will not be as good but will be better for the money)

 

[FANGO]

Yeah, the market has not yet come to the realization that the Model S is the second worst car Tesla will ever make. At least when you account for price of course. (ie Model 3 will not be as good but will be better for the money)

This is a good point, the cars really will only get better from here. There's always the chance they'll come out with a dud if Franz gets a little too experimental and people aren't into it, or something, but at least Tesla shows off their models early enough to gauge public reception and change them if people don't see to be into it, so that helps prevent possible duds anyway.

Also, I'm not even sure about that parenthetical. I bet a well-specced Model 3 will be better than a low-specced early-model S in a lot of ways, since Tesla will have worked out a lot of fit and finish and interior bugs by then and will just generally be a better automaker (though I suppose there may be kinks on the way to six-digit volume production, which is a whole different game than five-digit volumes). Either way, any Model 3 will be more desirable to me than any S based on size factors alone.

 

[30seconds]

by the way the morgan stanley "Bull" case has a $500 price target by Aug 2015. this is built on the gigafactory creating "material disruption in premium car market with larger inroads into grid storage" by producing a $100/kWH pack

 

[vgrinshpun]

Trip Chowdhry of Global Equities Research issued a commentary following the GF event, clarified his earlier musings regarding GF2, GF3, put a $60B value on the GF when in operation in 2017. The digest accoridng to streetinsider.com:

Global Equities Research is issuing commentary on Tesla Motors (Nasdaq: TSLA) following news Thursday night that the company and the State of Nevada inked a $1.25 billion deal for construction of a Gigafactory. The firm has Tesla at Overweight with a target price of $385.
Analyst Trip Chowdhry offered the following insight:

• Elon Musk said that "This is it" for the GigaFactory
  • Hence, there will not be any other locations - so no GigaFactory 2 or GigaFactory 3. Thus Arizona, California, Texas and New Mexico have missed out on GigaFactory
  • Nevada offered incentives of $1.25 billion, a lot more than what we were expecting. We were expecting the incentives to be about $300 million to $400 million
  • With incentives at $1.25 billion, Tesla motors does not need to build GigaFactories at other locations, hence Elon said "This is it"
  How should Investors value the GigaFactory?
  • One of the ways to think is the following - "What GigaFactory is to EV's (Electric Vehicles) :: Petroleum companies is to ICE (Internal Combustion Engine)"
  • The market cap of Chevron is $240 Billion; The market cap of Exxon Mobile is $420 Billion
  • Investors may want to give GigaFactory a %age value of either Chevron or Exxon Mobile
  • We think, when GigaFactory is fully operational in 2017, GigaFactory by itself could be valued at 25% valuation of Chevron, which would be about $60 Billion

 

[vgrinshpun]

Trip Chowdhry of Global Equities Research issued a commentary following the GF event, clarified his earlier musings regarding GF2, GF3, put a $60B value on the GF when in operation in 2017. The digest accoridng to streetinsider.com:

Global Equities Research is issuing commentary on Tesla Motors (Nasdaq: TSLA) following news Thursday night that the company and the State of Nevada inked a $1.25 billion deal for construction of a Gigafactory. The firm has Tesla at Overweight with a target price of $385.
Analyst Trip Chowdhry offered the following insight:

• Elon Musk said that "This is it" for the GigaFactory
  • Hence, there will not be any other locations - so no GigaFactory 2 or GigaFactory 3. Thus Arizona, California, Texas and New Mexico have missed out on GigaFactory
  • Nevada offered incentives of $1.25 billion, a lot more than what we were expecting. We were expecting the incentives to be about $300 million to $400 million
  • With incentives at $1.25 billion, Tesla motors does not need to build GigaFactories at other locations, hence Elon said "This is it"
  How should Investors value the GigaFactory?
  • One of the ways to think is the following - "What GigaFactory is to EV's (Electric Vehicles) :: Petroleum companies is to ICE (Internal Combustion Engine)"
  • The market cap of Chevron is $240 Billion; The market cap of Exxon Mobile is $420 Billion
  • Investors may want to give GigaFactory a %age value of either Chevron or Exxon Mobile
  • We think, when GigaFactory is fully operational in 2017, GigaFactory by itself could be valued at 25% valuation of Chevron, which would be about $60 Billion

The $60B value assigned to GF sounded a little optimistic to me, so I decided to do my own calculation to see what number do I get. My calc is based on quantity of cars that can be served by Chevron production vs. quantity of cars that can be served by the output of the GF. I will post the calc tonight in the Long Term thread, but the number I get is $4.4B based on 10 year lifetime of the car battery.

Would be interesting to see which method T.C. Used to arrive at $60B.

 

[Lump]

I am struggling with the $60B valuation, I think some of these analyst are getting ahead of themselves & want to make outrages "Henry Blodget" claims purely to gain notoriety.

 

[vgrinshpun]

I am struggling with the $60B valuation, I think some of these analyst are getting ahead of themselves & want to make outrages "Henry Blodget" claims purely to gain notoriety.

It does seem that his calculation (assuming that he did it) lacks rigor...

 

[Robert.Boston]

Analyst Trip Chowdhry offered the following insight:

• How should Investors value the GigaFactory?
  • One of the ways to think is the following - "What GigaFactory is to EV's (Electric Vehicles) :: Petroleum companies is to ICE (Internal Combustion Engine)"
  • The market cap of Chevron is $240 Billion; The market cap of Exxon Mobile is $420 Billion
  • Investors may want to give GigaFactory a %age value of either Chevron or Exxon Mobile
  • We think, when GigaFactory is fully operational in 2017, GigaFactory by itself could be valued at 25% valuation of Chevron, which would be about $60 Billion

This is silly thinking. First, Chowdhry should learn how to spell "ExxonMobil" (no space, no final 'e'). More substantively, petroleum companies have non-reproducible assets: oil reserves, government franchises, and industrial facilities that could not be built under current environmental standards. (The newest complex refinery with significant downstream unit capacity began operating in 1977 in Garyville, Louisiana.) There's nothing particularly unique about the Gigafactory, other than the exclusive relationship with Tesla Motors to supply battery packs. So, the plant is worst almost precisely what it costs to build.

 

[30seconds]

right now the plant is worth about as much as it will cost to build. However in a year or two it may be worth more as it may be the only large scale, low-cost battery production facility in the world. In that case it would give Tesla a massive advantage in terms of being able to build and sell high margin vehicles.

 

[AudubonB]

Ouch.
That update from Chowdhry was truly painful to read. Robert.B presented the salient sillypointes (sorry, GER: sillypoints); the reason I found it painful, however, was because it gives naysayers the FUD-powder so often used inappropriately against Tesla.

Take your time to come up with appropriate analogies and appropriate research. I think those points Chowdhry enumerated are, unfortunately, a perfect example of why Mr. Musk yesterday used words like “I think our stock price is kind of high right now". Yet Chowdhry wrote that afterwards!.

Ouch, ouch, ouch. Wall Street Journal is going to be jumping on that like a duck on a june bug.

 

[chickensevil]

duck on a june bug.

Note: it goes both ways... duck... chicken... either way, they sure do love them june bugs!

 

[adiggs]

OMG chickenevil - love it. I'm still laughing

(in my case, I grew up with chickens, so I know how they like bugs; seeing them in action does bring back good memories!)

 

[Derek Vinyard]

Stifel reaffirms its PT $400, followed by FBN and Baird

Good morning everyone

Today James Albertine has confirmed his sexy $400 PT.
Shebly Seyrafi from FBN Sec. confirmed her "outperform" rating and a PT of $325.
Ben Kallo stays with his $275 PT.

 

[CyberDutchie]

Adam Jonas doing it again, just wait for the headlines. In a new research note he is addressing the potential of Tesla ditching the Model X falcon wing doors. But again, it seems he is starting a rumor, no evidence is presented. Here are a couple of quotes:

Following a further delay of the Model X launch from 2Q to 3Q15, we can’t help but think of what we have long feared could be the biggest technical challenge with the Model X. Those attention grabbing, sensor- packed, futuristic double-hinged doors.

And then later in the article:

While the blogs have been full of rumors about potential difficulties with executing the doors in mass production, we have heard nothing specific to confirm that the doors are a particular root cause of the production delay. We are nonetheless asking ourselves the question: If the doors were presenting a significant engineering challenge, what are Tesla’s options and how much of a problem could this be?

And then he goes on to present two options: choice A: proceed with falcon doors and choice B: ditch the falcon doors and redesign model X for more traditional doors. Duh..

I guess all this speculation makes for an interesting article, but coming from Morgan Stanley, just count on a few headlines showing up, out of context, with a negative spin...

 

[Curt Renz]

Adam Jonas doing it again, just wait for the headlines. In a new research note he is addressing the potential of Tesla ditching the Model X falcon wing doors. But again, it seems he is starting a rumor, no evidence is presented. Here are a couple of quotes:...

I doubt that the final purchase decision by a potential buyer of a Model X will hinge on whether it has falcon wing doors. I'll trust Elon and his engineers to correctly determine whether those doors are worth the bother. Either way, I would not it expect it to affect Model X sales volume. It should not affect decisions to buy or sell TSLA shares, even though that may have been the case today, especially with bots reading the news. Cooler heads may soon prevail.