JP Morgan (JPM) Remains Bullish On Tesla (TSLA), Investors Underestimating Potential

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11:12:59 am on January 25, 2011

J.P. Morgan reiterated its Overweight rating on Tesla Motors (TSLA) yesterday giving the shares a bit of a boost.  They have a one year price target of $30 (about 30% upside) and a three year target in the $40 – $50 range.  They believe the majority of the investment community is underestimating the potential of the company with its power-train (used by Daimler and Toyota) and non power-train technologies.

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The argument out of JP Morgan is certainly a valid one particularly with Toyota and Daimler on board with the technology, but I still feel that there are better longer term investments out there.  For example Nissan (NSANY) which is launching the LEAF is up 50% since July and Toyota Motors (TM) is up 20% in three months.  Tesla is down nearly 40% in two months and about flat since the summer highs. 

I personally prefer to trade TSLA in the shorter term because it’s proving to be a good momentum stock in either direction.  For example, the stock soared 50% in November alone, then initiated a 40% correction since.  With the stock getting close to the November breakout point, it may soon offer another great trade entry, but there are too many uncertainties for a long term hold at this time in my opinion.

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