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Stock Strategist

Tesla Charges Ahead

We boosted our valuation on an improved profit outlook, but the EV maker still isn’t a buy.

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We recently increased our Tesla (TSLA) fair value estimate to reflect our brighter forecast for the company’s long-term automotive profitability, thanks to increased vehicle deliveries, higher average vehicle prices, and lower unit production costs. We continue to believe that Tesla has the potential to disrupt the automotive and power generation industries with its technology for electric vehicles, autonomous vehicles, batteries, and solar generation systems.

Tesla is the largest battery electric vehicle maker in the world. In less than a decade, it went from a startup to a globally recognized luxury automaker with its Model S and Model X vehicles. The company also competes in the midsize car and crossover SUV market with the platform that is used for its Model 3 and Model Y vehicles. Tesla plans to sell multiple new vehicles over the next several years, including a platform that will be used to make an affordable sedan and SUV, a light truck, a semi truck, and a sports car.

Seth Goldstein does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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