The Street’s Key Stock Analysts Research Reports
Day 3 of the Musk Mystery, as the pressure mounts on him to reveal the source of the $72-B needed to take Tesla private.
Daily HeffX-LTN reviews dozens of the Street’s Key analysts research reports to ID new trading and investing ideas for HeffX-LTN readers. Some reports cover stocks to buy, and others cover stocks to sell or avoid.
Below is a list of the Street’s Key analysts outlook for main issues for Thursday, as follows:
Tesla (NASDAQ:TSLA) CEO Elon Musk’s ‘420’ Tweet this has generated a lot of buzz across the market, but it also calls into question the ethics, motivation and even the legality behind this maneuver.
And Wednesday, it was reported that the Tesla Board of Directors has met several times to evaluate the possibility of Mr.Musk taking the company private, and we all must consider that Mr. Musk is the company’s largest shareholder and controls the Board
Shayne and I have been following Tesla since its IPO in 2010, and we have reviewed the current news and its impact (and continue to do so).
Now, there are many analysts and pundits on Wall Street that are updating their targets and views based on the shocking new developments.
Wednesday, former SEC Chair Harvey Pitt appeared on TV and opined that a case of securities fraud may have been committed here, if it can be proven that Mr. Musk was trying to manipulate the market. Chairman Pitt also noted that the move could put Mr. Musk at risk of civil and criminal penalties down the road.
The Key analysts upgrades
Merrill Lynch’s John Murphy maintained his Underperform rating and a 200 price objective based on much of the details being unclear. That report noted that funding is still needed, even if the Saudis or Chinese are involved.
The Merrill Lynch report said: It should be noted that the proposal/transaction is far from finalized, and would require a shareholder vote. More importantly, although Tesla did confirm a potential privatization through Musk’s statement, no theoretical transaction method, funding plan, or structure was outlined, and there is still some skepticism over whether such a transaction would ultimately (or even could) be executed… While much remains to be further elucidated at this point in time, we do assign some credence to the speculation. However, we continue to question the longer term profitability, cash flow, and valuation of Tesla.
CFRA reiterated its Hold rating on Tesla but raised its target to 380 from 300.
The report from Efraim Levy said: We are surprised by his claim of financing secured, even as the FT reports the Saudi Arabia Public Investment Fund took a stake in Tesla. Also, we see risks to achieving fruition, given our belief that additional cash funding would be prudent operationally, even without leverage from a buyout… we now expect a fourth quarter profit versus our prior modest loss outlook. Without a buyout, we factor in the rapid acceleration of profits we expect as TSLA soon ramps up more production of its Model 3 and the unusual investor support Tesla receives.
Tesla was maintained as Hold but the target price was raised to 360 from 250 at Jefferies & Company
Independent Research has a Hold rating, but the firm raised its price target to 420 from 288, based on the 420 Tweet price.
JPMorgan has an Underweight rating on Tesla but the firm raised its price target to 308 from 195, based on a blended 195/420 weighting.
Tesla’s stock has a 52-wk trading range of 244.59 – 389.61, and it had a consensus analyst price target of 320.67 prior to the news and ratings changes seen so far.
Remember: Tesla is still among the most shorted stocks on Wall Street.