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Tesla stock rises after Instinet turns more bullish on gross margins, cost leverage

Instinet analyst Romit Shah raised his worth target on Tesla Inc. TSLA, +zero.50% shares to $450 from $420 on Friday, mentioning his larger optimism about gross margins for the Model 3. "We believe Model 3 ASPs are coming in above forecast due to stronger-than-expected demand for all-wheel-drive and performance configurations," he wrote. "We now estimate blended Model 3 ASPs approaching $60,000 in 2H18." Shah also sees Tesla achieving more "cost leverage" as it ramps up manufacturing and reaches better scale. "We believe that Tesla can lower per unit costs considerably in the coming months, driven by improved fixed cost absorption and higher labor efficiency," Shah mentioned. Tesla shares are down 15% over the last 12 months, while the S&P 500 SPX, +zero.31% has won 14%.