Tesla 'Uniquely Positioned To Lead In Ecosystem,' Macquarie Says In Bullish Initiation

Macquarie analysts view Tesla, Inc. TSLA as a disruptive growth company “with differentiated products and strong brand presence in the secularly growing and equally disruptive markets of electric vehicles, energy storage and energy generation.”

The Analyst

Macquarie's Maynard Um initiated coverage of Tesla with an Outperform rating and a $430 price target.

The Thesis

According to the note, the initiation was driven by five key reasons, including:

• Accelerating vehicle unit growth.
• Unique potential among original equipment manufacturing.
• Technology differentiation.
• Continued traction in the energy storage market.
• Optionality as a leader in autonomous driving.

On a long-term basis, Um considers Tesla uniquely positioned, given its lead in the deep software integration involved in electric vehicles, as well as its position in autonomous driving. Tesla accumulates over 8 million miles of real-world driving data per day, according to Um.

On a near-term basis, the thesis is based on the company’s debt, Model 3 sales and potential for credit amendments.

“While CEO Elon Musk has said the company does not have to raise more capital, we believe a raise through equity would be beneficial in further strengthening its longer-term outlook as well as providing a cushion in case of any unexpected periods of economic softening," Um wrote in the note.

Price Action

Tesla shares were up about 1 percent to $253.38 in Monday's after-hours session. THe stock clsoed down 4.3 percent at $250.56.

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