Tesla soars on positive analyst report

The automaker could become a major competitor in the electrical grid storage business as well, says Morgan Stanley's Adam Jonas.

By MSN Money Partner Feb 25, 2014 2:02PM
Tesla Model S sedans outside of the Tesla Factory on August 16, 2013 in Fremont, Calif. (© Justin Sullivan/Getty Images)By Mike Ramsey, The Wall Street Journal

Tesla Motors (TSLA) might be on the verge of disrupting two industries, warranting a share price of $320, says Morgan Stanley (MS) analyst Adam Jonas in a note to investors released Tuesday.

Shares surged more than 17 percent to $255.75 in midday trading on the Nasdaq after Jonas released his note.


That new share price target is up from $153. Its shares have soared following an adjusted $46 million fourth-quarter profit and reports of rising production capacity and demand.


Tesla is expected this week to announce plans to build a new battery factory along with partners that will be able to take raw materials in on one side and produce batteries out the other side, lowering the cost of battery cells. Jonas thinks that the cell production has the potential to have Tesla become a major competitor in the electrical grid storage business.


"Tesla's request to disrupt a trillion [sic] $ car industry offers an adjacent opportunity to disrupt a trillion $ electric utility industry," Jonas writes in a note titled "Nikola's Revenge: TSLA's New Path of Disruption."


He estimates that Tesla will be producing 370,000 vehicles a year by 2020, up from 22,400 last year. By 2028, the company should be over 1.1 million units of production, and the Teslas out in service could be used as back-up grid storage for the utility industry. 


Much of the volume is connected to Tesla’s planned "Gen 3" vehicle, which the company aims to put out in 2017 with 200 miles of electric range and a starting price around $35,000.


His bear case for Tesla still estimates that the company will be making 220,000 vehicles a year by 2020, warranting a $100 a share target. Porsche, a division of Volkswagen AG (VLKAY), sold a record 162,145 vehicles in 2013, for comparison.


More from The Wall Street Journal

7Comments
Feb 25, 2014 10:09PM
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"Tesla's request to disrupt a trillion [sic] $ car industry offers an adjacent opportunity to disrupt a trillion $ electric utility industry," Jonas writes in a note titled "Nikola's Revenge: TSLA's New Path of Disruption."


Now if he pulls that off, that would be a major game changer.

Feb 25, 2014 4:08PM
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Is "Adam Jonas" the pen-name that Henry Blodgett is using now a days?

 

Feb 25, 2014 4:44PM
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delaying implementation til after the next election is so easy to see thru.  Obama knows what this program is. H e knows it will devastate the economy.  And half of our country doesn't believe it or doesn't care.  When the CRAP hits the fan it will be too late to fix it.  I have 25 employees and will have to convert to OBama care when our policy terms out tis year.  At that point I will have to drop our insurance and tell everyone to go get their own.  It's one thing to pay for what we have.  It's another to have to pay a predicted double amount to comply with Obama care. Anyone out there who thinks small businessmen are lieing about this please go to hell.  If you've never ben the person in charge you really have no idea of what you're talking about.  And being in charge of spending public sector money ha nothing to do with the real world so you government money people can go to hell.    

A goo friend asked me if I didn't feel responsible to spend my money to help the less fortunate.  I asked him if he was going to take a large percentage of his government pay to help these people.He said it was not up to him it was my job to  do the helping.  If that's not a frickin liberals response  don't know what is.   

Feb 25, 2014 8:37PM
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Someone the Business owner....Can't even figure out what page or article he is on...

And they have 25 people working for them??, the poor bastards....

Feb 25, 2014 4:25PM
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Insurance is a one way street. You pay them, they try their best not to cover you. My mother paid her insurance for years but when she actually had to use it the insurance companies claimed the doctor didn't fill out the paper work correctly and would not pay for anything. We are talking an 800 dollar bill, not 80,000, "Health" Insurance, has never been and never will be the same as actual care.  We are being made to pay a third party (that provides no actual services) in hopes that we get a discount when we go to a doctor.  You only get anything "free" if you pay more then what it would cost without insurance.  Pay a provider thousands of dollars for hundreds in discounts if they can't find a loophole to screw you out of even that.  Insurance has to be the worst scam ever.  We didn't always have insurance, doctors used to charge reasonable rates.   A real healthcare law would mandate how much doctors charge verses the actual cost to them.  A real healthcare law would pay doctors directly from taxes collected.
Feb 25, 2014 11:19PM
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Beware of the pump and dump investment banks like GS, JPM and MS. If US auto makers were any good at all why are most bailed out by US government or bought out by foreign auto makers.
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