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Tesla Motors Inc (TSLA): 3 Exterior Factors Working In Its Favor

Tesla Motors Inc (TSLA)’s stock been rapidly rising since the beginning of the year, and today is no different. Shares rose as much as 8 percent after Jefferies analysts raised their price target and outlined three major outside factors that are working in the automaker’s favor. They cited growth in the full-size premium sedan market, growth in the alternative vehicle market and increasing regulatory pushes toward electric vehicles.

Tesla Motors Inc (NASDAQ:TSLA) rose as much as 7 per cent after a sparkling report from analysts at Jefferies. They raised their estimates and almost doubled their price target for the company. In addition, they made other adjustments to their models based on several outside things the automaker has working in its favor.
Tesla Benefits From Growth In Full-Size Premium Sedan Market

First, analysts Elaine Kwei and Peter Nesvold said Tesla Motors Inc (NASDAQ:TSLA) is greatly benefiting from sales growth in the full-size premium sedan segment. They consider full-size luxury sedans to be the closest competition to the Tesla Model S, which puts the vehicle in a category with the BMW 5/7 Series, the Mercedes E/S class, the Porsche Panamera and the Audi A6/7/8.

They note that in 2012, U.S. sales of those particular vehicles included about 210,000 units or about 1.5 percent of the U.S. market. This year through May, luxury sedan sales rose 10.4 percent, and that number includes Tesla’s Model S. The analysts said if the Model S was excluded from those numbers, sales of that vehicle class would only be up .8 percent. They note that if sales of the Model S continue going at the same rate they have been this year so far, Tesla Motors Inc (NASDAQ:TSLA) will make up about 9 percent of the relevant market.

“We think that’s a tremendous accomplishment for a new all-electric vehicle competing against some of the finest automakers in the world,” Kwei and Nesvold wrote.


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