Model 3 demand fuels Tesla hope, report says
There is plenty of demand in the U.S. for Tesla Inc.’s Model 3, and the sedan’s potential to win customers from mass-market competitors should counter concerns about the electric-car maker’s performance, analysts at Piper Jaffray said in a report.
Projections for the model’s U.S. sales, as well as Tesla’s plans to make the car at a new plant in Shanghai, should offset investor worries about demand for its more expensive vehicles and in China, analysts including Alexander E. Potter wrote Friday in the report.
“We understand why some investors consider the stock un-investable, but of all the reasons to doubt our overweight thesis, we think weak demand is among the least convincing,” Potter said.
Tesla shares have slumped 38% this year on concern that customer interest in its vehicles was waning. Still, the stock has rallied the past three sessions, closing Thursday at $205.95. Potter has a target price of $396.