Snap Back to Reality; Stifel Updates Ests on Tesla (TSLA) Following Q1 Report, Outlook

Stifel affirms its Hold rating on Tesla Motors, Inc. (Nasdaq: TSLA) following Q1 results issued Wednesday night.

On the numbers, analyst James Albertine commented, We think 2Q expectations for slight profitability in light of (a) global dispersion of Model S and (b) internal investment in Model X should bring some reality back to the momentum driven, high-flyer mentality that some have taken with their TSLA model outlooks. The step up in R&D costs, for example, are indicative to us of normal growing pains of any new product or technology, but it doesn't stop there as we have cautioned before. Remember, while TSLA has made significant advances in pioneering electrification for high-end vehicle consumers, the reality is its production, retail, and infrastructure obstacles ahead resemble an automotive company rather than a technology company. To be clear, we believe TSLA will gain share and will continue to produce exciting, compelling battery electric vehicle options for the foreseeable future. However, as the momentum wanes we think shares more realistically settle in to a $175-$195 range, inclusive of some valuation representing a "call option" on the potential energy storage business.

On Tesla breaking ground at two different Gigafactory locations at once, Albertine noted, The upfront incremental costs associated with two construction sites should be more than made up by finishing the factory construction on time, which coincides with the planned capacity build-out of the Fremont facility. Management noted that these increased costs pale in comparison to the lost revenue from not having the factory up and running within their planned timeline.

Looking ahead, Albertine is lowering his Q214 EPS estimate from $.27 down to $.06 and FY14 EPS from $1.76 down to $1.34. FY15 EPS moves from $3.83 to $3.61, while FY16 EPS increases from $5.08 to $5.11.

For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.

Shares of Tesla Motors closed at $201.35 yesterday.

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