A report stating that Tesla Inc. is on track to make the largest number of Model 3 sedans that the Silicon Valley auto maker has promised has given the company's shares a blow to the arm Thursday.
The TSLA shares, -0.96%
became positive during midday trading, and they seemed ready to take a series of two-day losses that caused weekly losses of more than 4%. The shares recently fluctuated between gains and losses but were outside the session lows.
Evercore ISI analysts wrote Thursday that they visited the Tesla Fremont factory, California, for two days, visiting the production line of model 3 and left "incrementally positive" on Tesla. Another report, from Bernstein analysts who have raised their price target on the stock, has also played its part in supporting the title.
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"Tesla seems on track to reach a constant weekly production rate" from 5,000 to 6,000 Model 3 sedans a week, Evercore analysts said, led by George Galliers.
"In addition, the required capex and the constraints that must be exceeded to reach from 7k to 8k units a week seem to be on hand," they said.
The previous Evercore model 3 production estimate of 123,000 sedans in the second half of the year could be "from 4% to 7% too low" after what they saw during the trip, analysts wrote.
See also: Opinion: Wall Street has spoken: Tesla funding is not "guaranteed"
"While downtime and maintenance continue to constrain production, we have not seen anything that would suggest that Tesla is not able to produce 5k Model 3s per week today and at least 6k Model 3 a week very soon, "they said.
The report was a welcome diversion from the concerns centered on the go-deprived plan of Elon Musk CEO and the questions that revolved around the necessary financing for that move and the legal questions on the tweet of Musk who announced the proposal.
Musk shocked the markets on 7 August when he tweeted that he was "considering" he had privately held Tesla for $ 420 per share, and that the funding had been "
The regulators launched an investigation on the statement of "secured financing" and the following post on the blog of Musk detailing the meetings with the sovereign fund of Saudi Arabia has done little to dispel the doubts on the potentia I'm going-private transaction.
more: Elon Musk left a lot of questions about Tesla becoming private, experts say
In their report, Bernstein analysts led by Toni Sacconaghi increased their price target on the Tesla stock for $ 325, representing the downside of about 4%, from $ 265.
"On the net, our fundamental valuation analysis suggests that Tesla is fully evaluated at current levels. In practice, however, we believe that well-established bulls and bears will not capitulate until Tesla is private "
Analysts have attributed a probability of less than 50% that Tesla will become private.
agreement does not materialize, it is likely that downwards there are about $ 300 per share, below the $ 340 that Tesla was trading before the first tweet of Musk.
Bankruptcy "could push investors to always discuss plus the credibility of Elon and the seemingly unhealthy focus on price and volatility of equities, "said Bernstein analysts.
A more solid take-private bid could lead to a rise of about $ 400 per share, they said, below the $ 420 that Musk said "how we doubt that investors will have 100% certainty about the closing agreement until it happens."  Tesla shares are keeping an increase of 9% this year, which compares with a gain of 6.4% and 3.3% for the S & P 500 index
SPX, + 0.79%
and Dow Jones Industrial Average.
DJIA, + 1.58%
This outperformance evaporates, however, over a period of 12 months, with Tesla shares declining by almost 7% in that period compared to earnings 15% and 16% for S & P and Dow.