Tesla (TSLA) rises amid Canaccord’s $515 price target, GF3’s mass Model 3 deliveries

Tesla shares (NASDAQ:TSLA) rose on Thursday amid news of China’s impending mass deliveries of the MIC Model 3, as well as Canaccord Genuity’s updated price target for the company. The Wall St. firm’s optimistic stance on Tesla is evident in its updated price target, which currently stands at $515 per share, a far cry from its previous PT of $375 per share. 

Canaccord Genuity analyst Jed Dorsheimer, who reiterated a “Buy” rating on TSLA stock, stated that the trend for the adoption of electric vehicles “will only accelerate in 2020.” In a note to clients, the analyst stated that he expects a solid fourth-quarter performance from the electric car maker, which should prove the pervading bearish narratives against the company wrong. 

“While bears have feared demand issues as a function of tax credit expiration for Tesla, we suspect a solid Q4 combined with the robust Q3 should put these fears to rest,” the analyst said, adding that he also estimates the electric car maker to deliver 369,000 vehicles in 2019. That’s slightly above the lower end of the company’s guidance of 360,000-400,000 cars for the year. 

It’s not just Canaccord that has given Tesla an optimistic outlook, either. In a recent note discussing Tesla’s 2020 delivery prospects, JMP Securities analyst Joseph Osha mentioned that “unit expectations for this year are oddly low.” The analyst also speculated that the consensus did not seem to reflect a contribution from Tesla’s Gigafactory 3 in Shanghai, which is poised to start mass deliveries soon. 

Osha’s comments reflect a potential surprise from Tesla’s China factory. So far, Wall Street has been quite conservative with its estimates for Gigafactory 3’s 2020 output and deliveries. Staunch TSLA critics have also taken issue with the fact that the company only delivered 15 Made-in-China Model 3 on December 30. These concerns may ultimately be unfounded, as Tesla China has announced that it will start delivering the MIC Model 3 to the public on January 7. 

As noted in a Reuters report, the next wave of MIC Model 3 deliveries will be on a far larger scale compared to the 15 that the company handed over in its December 30 event. This time around, Tesla seems to be preparing to deliver mass numbers of Model 3, considering that car carriers have been transporting vehicles from GF3 to delivery centers across China even before the company received its final sales license from regulators. 

Tesla’s January ramp for the MIC Model 3 was discussed by China general manager Wang Hao. In a statement to the publication, Wang stated that Tesla China would be doubling the number of service centers and fast-charging stations in the country in 2020. He also said that sales of the Made-in-China Model 3 have so far been “very good.”

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

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