Jefferies Sees Tesla Earnings Growth Standing Out, Upgrades Shares To Buy

Jefferies analyst Philippe Houchois upgraded Tesla (TSLA) to Buy from Hold and raised his price target for the shares to $450 from $360. The stock closed yesterday up $3.36 to $363.06.

While the shares have done well since the Q3 report with Tesla having demonstrated its profit and self-funding potential, the company's growth becomes "value-accretive" just as peers are engaging in a mostly negative electric vehicle "sum game," Houchois tells investors in a research note partially titled "Playing a positive sum game." Tesla is one of a few car makers likely to grow earnings in 2019 and 2020, adds the analyst. He thinks Tesla in the year ahead "will avoid a volume zero-sum-game or negative margin trade-off in EVs."

Further, Houchois says he saw "ample scope to improve flow, boost output on fewer shifts, and offset upcoming Model 3 mix dilution" during his recent trip to the company's Fremont facility.