Tesla shares ride 18 percent higher on Model S success
By Sagarika Jaisinghani and Mridhula Raghavan
(Reuters) - Shares in electric sports car maker Tesla Motors Inc (TSLA.O: Quote) jumped 18 percent to a record high on Thursday, after surprisingly strong second-quarter results convinced investors the company has found a route to sustainable profits.
Tesla's shares have more than doubled since it reported its maiden profit in the first quarter of the year -- hitting new highs most weeks.
At least seven brokerages raised their price targets after Tesla reported its second profit in a row late Wednesday, by as much as $69 a share.
Their targets now range up to $187, compared with the new record share price of $158.88, struck on Thursday on heavy volumes after Tesla said it had sold more of its popular Model S sedans than expected.
"The bull argument for the stock could be that the CEO, Elon Musk, is the next Henry Ford - i.e. mass market success would be assured," said Barclays Capital analyst Brian Johnson, who raised his target on Tesla to $141 a share from $90.
The Model S is the best-selling U.S. electric car despite a starting price of more than $70,000. The company sold 5,150 cars in the second quarter and said on Wednesday it expects to reach an annual production rate of 40,000 by late next year as it starts selling in Europe and Asia.
With so many alternative-energy firms struggling -- such as solar power companies and other electric car companies -- analysts say Tesla appears to have broken away from the pack.
"We look at Tesla as not only an auto manufacturer, (but) a trend-setting consumer brand, and a leader in technology that dozens of companies both larger and smaller have failed at perfecting," Robert W. Baird & Co analyst Ben Kallo wrote in a client note on Thursday. Continued...