Elon Musk's Tesla News: What Wall Street Expects


Elon Musk announced this week that "some news from Tesla"will come at 2 pm on Thursday at 2 pm, this week's time.

Due to its timing – in the middle of a resumption of struggle with federal regulators and a multitude of Twitter memes – the cryptic indication fueled a wave of speculation.

Prior to the announcement, Ben Kallo, an analyst at Baird, said Tesla was a "new choice" and reaffirmed its price target of $ 465 – one of Wall Street's highest. Regardless of what the news ends up being, he says it should help the stock gain momentum.

"Regardless of the content of the company's update, we believe that the demand issues are exaggerated and believe that this announcement could be a catalyst," Kallo told customers Thursday morning.

"Investor skepticism about demand (in the first quarter and through 2019) has been high in our recent conversations, and we anticipate that this update could highlight positive business developments and improve overall sentiment."

Among the possibilities for today's announcement are the long-awaited version of Model 3, an update on autonomous driving (Musk's previous comments were deemed dangerous by the experts). , or even the Y model.

Read more: Tesla could unveil the Y model this year – here's all we know about the vehicle up to now

Kallo hopes however that this is not the Y model.

"We believe management is aware of the need in the short term to reassure investors about the demand and margins of Model 3," he said.

Adding another product to the mix could complicate Tesla's lingering headaches around the production ramp and delivery logistics.

This is not an offer to increase the share price of Tesla before the conversion of $ 920 million of bonds. The observation period of the notes ended with shares below the conversion price of $ 359.88, and Bloomberg announced that the company would repay the creditors with a combination of cash and equity.

In addition to paying off the debt, Kallo said investors should focus on long-term fundamentals to avoid the "constant noise" around Tesla.

"The SEC has recently asked a federal judge to sentence Musk to civil contempt, which has caused a lot of noise (staff turnover, SEC headlines, etc.) in recent weeks," said Kallo.

"We believe that the weakness of the stock has created a buying opportunity for investors eager to focus on improving the fundamentals of the company."

Tesla shares fell about 0.6% in trading Thursday, nearly $ 313. The title is about 23% of its 52-week high, at $ 387 a share, hit last August by Musk's unsuccessful attempt to privatize the company, which triggered the ongoing regulatory drama.

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