Citigroup initiated coverage of electric car maker Tesla Inc. Thursday, with a neutral/high risk rating and $357 stock price target. That's equal to about 10% upside from its current level. "We're positive on Tesla's position as a Car of the Future leader and view the upside case to still be significant, however, we prefer to wait for a better entry point either through: (a) A stronger balance sheet, which in our view would more favorably tilt the 12-month risk/reward equation, all-else-equal; or (b) convincing signs of a smooth Model 3 ramp with limited Model S cannibalization," analyst Itay Michaeli wrote in a note. The analyst said he is "fundamentally bullish" on Tesla, but that both bull and bear cases for the stock have merit. On the bull side, the company has had initial product success, brand appeal, speed of innovation and tech/software leadership," he wrote. The next 12 months rely on Tesla achieving Model 3 conversions and meeting margin goals, while continuing to cement its leadership in self-driving. Tesla shares were slightly lower premarket, but have gained 52% in 2017, while the S&P 500 has gained 10.5%.
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