Tesla Motors Inc. was named top pick for 2017 by Baird Equity Research Friday, with analyst Ben Kallo forecasting that Tesla Energy and Model 3 production will beat expectations. “We believe TSLA’s energy storage business and growth opportunity is not currently reflected in share prices,” Kallo wrote in a note. Baird believes battery sales are increasing and should get another boost from the battery production ramp coinciding with the launch of the Model 3, the all-electric sedan Tesla hopes to sell late next year for about $35,000. “We recommend accumulating shares ahead of additional details being released about TSLA’s current battery costs and density metrics, and believe the upcoming Gigafactory tour on January 4 will be a positive catalyst for the stock,” he wrote. The company’s Powerwall 2 battery offers a competitive pricing advantage on a per kilowatt basis, and should help Tesla grow its share of homes and small business customers, he wrote. The company’s fourth-quarter delivery number might create short-term volatility, but the stock should move higher, he said. Kallo is further expecting Tesla to do a deal some time in the first half that would remove an overhang on the stock. Tesla shares were slightly higher premarket, but are down 10.6% on the year, while the S&P 500 has gained 10%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
From:: Stock Market News