Tesla Bull Case Raised To $439 At Pacific Crest -- 26.5% Above Its Current Level

Pacific Crest said Tuesday it expects Tesla Inc. shares to continue to rise in the near term and said it's raising its bull case for the stock to $439, equal to 26.5% above its current trading level. The catalyst for the bullish move is the launch of the Model 3 next month, the $35,000 sedan that is aimed at the mass market. Analysts Brad Erickson and Elliot Arnson said sentiment on the stock is "hitting the moon" as investors await the Model 3, although buyside expectations for the new vehicle are low and could fall. "Perception of future demand is as important as actual deliveries (maybe more important). If the car is perceived as awesome, already-low 2H17 buy-side expectations will actually fall," they wrote in a note. Longer-term, they expect optimism on Tesla to become more muted, as investors return to evaluating the company on demand, growth and profitability. That is the thinking behind their sector weight rating on the stock, the wrote. Tesla shares have gained 62.5% in 2017, while the S&P 500 has gained 9%.