Tesla Motors Inc (NASDAQ:TSLA) is readying the display of its much anticipated mass market electric sedan it calls the Model 3, tomorrow. As is customary for all major announcements from Tesla, investment firms are weighing in mixed opinions relating to Tesla’s transition as a mass automaker.
On Tuesday, UBS laid out a “cautious” outlook for Tesla’s Model 3 event. Talking to CNBC, the firm’s analysts said Tesla’s massive cash burn along with slow pace of expansion would take Tesla significantly longer to transition into high-volume automaker than what analysts and investors expect. UBS has a ‘Sell’ rating for Tesla and a $120 price target.
On CNBC’s program ‘Closing Bell’, another Wall Street firm, Stifel’s analyst James Albertine who is strongly bullish on Tesla said Tesla’s current state of progress – implied by the rapidly growing sales numbers each year – suggests it will give tough competition to both high end and mass market automakers.
Analysts’ opinion today however has been rather positive. Goldman Sachs and Credit Suisse – two investment firms widely followed for their investment advice – said Tesla stock is a good buying opportunity for investors going into the Model 3 event tomorrow.
Credit Suisse analyst Dan Galves in an update report today said that while he does not expect the Model 3 vehicle itself to be any more special than what the company has hinted or what analysts and investors expect, the firm believes the real positive surprise will be driven by reservation numbers for the new mid-priced sedan.
Credit Suisse which has a $240 price target for Tesla believes Model 3 reservations to exceed 100,000 units in the first several weeks. A major catalyst driving Model 3 reservations will be the current Model S and Model X owners who are being prioritized ahead of new Tesla owners, the firm said.
Goldman Sachs on the other hand believes the Model 3 – when it hits American roads late next year – will be the main driver of Tesla’s longer term sales goal of inflating deliveries five times from current levels by the end of the current decade.
Both Credit Suisse and Goldman Sachs are not very optimistic about the design or the features of the Model 3 itself to excite investors or analysts to the point of a strong immediate rally in the stock.
Shares for Tesla are trading down 0.5% to $229.05 in early trading today. So far this year, the stock is down 4%.