Canaccord has raised its rating on Tesla on "buy" from "keep" and raised its price target to $ 450 per share, against a previous estimate of $ 330, claiming that electric vehicles penetrate the world's markets whole was not fully appreciated by investors on Wall Street. Canaccord also said it does not fear an upcoming conversion of a bond issue, given the group's strong operating cash flow and its current cash balance of about $ 3.7 billion of dollars.
"We believe that the last two quarters and recent forecasts for the first quarter have eliminated significant capacity and profitability issues in the critical model 3. As such, we expect a more stable 2019 year with less concern for the company's investors, "Canaccord said. analyst Jed Dorsheimer. "We view the recent round of price reductions as further evidence that the company's cost reduction and proper sizing is leading to a concrete breakthrough towards the ultimate goal of an affordable $ 35,000 model." ".
Tesla shares recorded a 2.55% increase in pre-market trading on Monday, indicating an opening price of $ 313.59 each, which would reduce its decline in three months to about 10.6% .
Tesla will face a payment of $ 920 million next month if the price of its stock does not exceed $ 359.87 each, while investors in a convertible bond previously issued opt for cash or cash shares of the company. On January 29th, Tesla declared "to have enough cash to settle in cash our convertible bond which will expire in March 2019".
Last month, Tesla announced a reduction of about 7% in its workforce and warned that fourth-quarter earnings would likely be lower than in the previous quarter.
The electric automaker reported quarterly revenue of $ 7.23 billion and non-GAAP earnings per share of $ 1.93. Analysts surveyed by FactSet were expecting a turnover of $ 7.12 billion and non-GAAP EPS of $ 2.20 for the quarter.
In addition, Tesla also reported cash and cash equivalents of $ 3.7 billion at the end of the fourth quarter.
Musk also noted that, while fourth-quarter shipments accounted for "almost as many cars as we did in 2017", the group still needed to cut prices to make products "competitive with fossil fuels." ".