Tesla Inc. (TSLA) received a bullish projection from Wedbush Securities analyst Daniel Ives who said in a note that demand for the company’s Model 3 electric sedan looks strong heading into 2019 and production problems seem to be resolved.
Ives added that investors appear to be focusing more on the company’s market opportunity and less on the production issues that plagued it in 2018. He believes that even in the midst of a shift in customer preference towards SUVs, the Model 3 is likely to see an increase in demand.
This will be advantageous for Tesla as it enjoys a strong position in the electric vehicle market. It could help the company improve profits and cash flow going into next year thereby reducing the need to raise capital. Ives rated Tesla’s stock as Outperform.
The scope for the international sales of Model 3 appears to be widening. The company is anticipated to see strong growth in China due to the recent price cuts. The Model 3 shipments and delivery in Europe seem to be on track and even though Tesla might face slight delays during the first half of 2019, the demand appears to be strong.
However, in 2019, investors will have to keep an eye on how Tesla balances supply and demand along with its Model 3 production as well as the profits and margins trend. Tesla’s shares climbed higher on Wednesday following the bullish outlook. As of 1:00 pm ET, the stock was up 4.5%.
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