Nomura Instinet analyst Romit Shah raised his price target for Tesla (TSLA) to $450 from $420 after meeting with the company at its Fremont facility and the shareholder meeting earlier in the week. Tesla closed yesterday down $3.41 to $316.09.
The analyst now believes Model 3 average selling prices are coming in above forecast due to stronger than expected demand for all-wheel-drive and performance configurations. He now estimates blended Model 3 ASP's will approach $60,000 in the second half of 2018. Further, Shah also anticipates cost leverage as Tesla scales to higher levels of production.
Tesla can lower per unit costs considerably in the coming months, driven by improved fixed cost absorption and higher labor efficiency, the analyst tells investors in a research note. Shah keeps a Buy rating on Tesla shares.
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