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Will Tesla Motors, Inc. Win the Race to a Self-Driving Car? Analysts Weigh In

By Carly Forster

Shares of electric car company Tesla Motors, Inc. (NASDAQ:TSLA) have jumped almost 5% in pre-market trading after Morgan Stanley analyst Adam Jonas increased his price target on the stock by 66% from $280 to $465, while maintaining an Overweight rating.

Jonas bases his bullish rating on his confidence in “Tesla Mobility, an app-based, on-demand mobility service.” The analyst believes Tesla is well-positioned to obtain a large market share in the race to self-driving cars, citing “Given the pace of technological development both within Tesla and at rival technology and mobility companies, we would be surprised if Tesla did not share formalized business plans on shared mobility within the next 12 to 18 months.”

Jonas believes that if Tesla starts “selling miles in addition to selling cars,” the company’s potential revenue could more than triple by 2029. Furthermore, “If Tesla wants to make good on its mission to accelerate the world’s transition to sustainable transport, we see the move to a shared mobility model as critical.”

Overall, Adam Jonas has a 58% success rate recommending stocks and a +18.9% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated Tesla 32 times total, earning a 74% success rate recommending the company and a +42.0% average return per recommendation.

Conversely, S&P Capital analyst Efraim Levy maintained a Sell rating on Tesla on August 13 after the company announced a secondary offering of 2.1 million shares of common stock. The analyst believes “Tesla’s plan to issue 2.1 million shares for net proceeds of about $500 million (before overallotments), combined with existing credit lines, will provide the company with more than enough cash for operational purposes into 2016. It also shows the power of an expensive stock to make funding relatively cheap, as we see only 1.6% dilution from the base offering.”

On average, Efraim Levy has a 65% success rate recommending stocks and a +11.7% average return per recommendation when measured over a one-year horizon and no benchmark. He has rated Tesla 6 times total, earning a 20% success rate recommending the company and -7.8% average loss per recommendation.

Out of 14 analysts polled by TipRanks within the past 3 months, 6 analysts are bullish on Tesla, 3 are neutral, and 5 are bearish. The average 12-month price target on Tesla is $294, marking a 20.91% potential upside from where the stock last closed.

Carly Forster writes about stock market news. She can be reached at Carly@tipranks.com