Orlando, FL 3/26/12 (StreetBeat) -- Wunderlich Securities’s Theodore O’Neill this morning raised his rating on shares of electric vehicle maker Tesla Motoros (Nasdaq: TSLA) to Buy from Hold, writing that his tour of the company’sFremont, California factory on Friday relieved him of concerns the company would not be able to meet its production goals.O’Neill, who raised his price target to $49 from $30, writes that “We were eager to get into the Fremont factory because we believed the company’s goals were ahead of its means in the area of auto production.”
Instead, we were confronted with some hundred or so of the massive dies needed to produce the model S body. Although none of them were inside the presses, it was clear that between what was on the floor and what was coming in from suppliers, it was at or ahead of schedule […] The dies were all from a world-class automotive die maker and supplier to Honda, Fuji Technica & Miyazu. The dies had clearly been used to stamp out body parts in Japan where much of the panels we saw had come from. Now they were in Fremont being staged for production there.
There is “no reason from a production standpoint why it can’t immediately ramp to 5,000 cars per quarter,” writes O’Neill.
O’Neill thinks the “Model S” Sedan can “sell itself” once built, his main concern being the ultimate market size for Tesla, as well as what he expects to be an “aggressive response” from BMW and Mercedes.
Still, O’Neill writes Tesla need only make $1 in profit per share by 2014 to justify his $49 price target.
That is less than half the $2.40 per share the Street is currently estimating.
Tesla shares today are up $1.61, or almost 5%, at $35.69.
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