Tesla Motors, Inc. (NASDAQ: TSLA) on Thursday got upgraded by Morgan Stanley as the Wall Street firm expresses positive views on Model 3 volume.
Morgan Stanley analyst Adam Jonas upgraded the automaker to Overweight from Equal-weight and raised its 12-month target price to $305 from $242. The analyst cited that they see a “soft” Model 3 launch coming in the fourth quarter and volume ramping up significantly in 2018.
Tesla shares surged 2.71 percent to $244.74 at the early trading on Thursday. It closed at $238.36 on Wednesday. The stock has gain 14 percent since the beginning of this year. Adam’s target price represents a 28 percent upside based on Tesla shares Wednesday closes.
“Adding 75k additional units of Model 3 to our 2018 estimate and nearly 100k units to our 2020 estimate results combined with the out-year impact adds a combined $81 to our Tesla target. Small offsets from the 4Q delivery pre-announcement and higher capex takes our target to $305.” The analyst wrote in the note.
The analyst also cited less competition from Apple and Google and a “surprisingly supportive political environment” also help the company.