Tesla is near the top of list of stocks that Wall Street is most confused about

Finance


Still, for Tesla, a cursory glance at headlines in the past few weeks shows an exceptional growth in the division between Tesla optimists and pessimists.

For example, Baird reiterated its outperform rating on Wednesday, predicting that the Palo Alto-based automaker will make significant progress in its Model 3 output. The analyst reaffirmed his $411 price target for Tesla shares, representing 48 percent upside to Thursday’s close.

“Negative headlines have increased substantially in the past month and, in our opinion, increasingly immaterial reports have dominated news cycles,” analyst Ben Kallo said in a note. “We think we have hit a peak in negative coverage/sentiment.”

German investment bank Berenberg also remained upbeat earlier this week, arguing that Model 3 gross margins will “positively surprise.”

The firm raised its price target for Tesla to $500 from $470, representing 80 percent upside to Thursday’s close, predicting it will be able to meet its 25 percent gross profit margin forecast for the Model 3. The investment bank also reiterated its buy rating for the stock.

Some analysts aren’t convinced, however, including Morgan Stanley’s Adam Jonas. The analyst slashed his price target to $291 from $376 for Tesla shares last Tuesday, saying the firm is “making material reductions to our earnings estimates to reflect lingering manufacturing issues.”

“It is our view that the challenges in ramping up Model 3 production reflect fundamental issues of vehicle design, manufacturing process, and automation levels that can weigh against the profitability of the vehicle,” Jonas wrote.

Tesla’s share price, which has declined nearly 11 percent this year, is closely related to Model 3 production. The percentage of Tesla’s available stock currently sold short exceeds 30 percent, according to FactSet.

Goldman Sachs isn’t a fan, either.

“We believe the sustainable production rate for the second quarter of 2018 is most likely below the 2,000 vehicle mark the company achieved in the final week of the [first] quarter,” Goldman analyst David Tamberrino wrote last month. “We see the company likely sustaining Model 3 production around the 1,400 per week mark.”

Disclosure: Jon Najarian is a frequent guest on CNBC’s “Fast Money: Halftime Report.”



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