Research firm Pacific Crest has raised its outlook for Tesla, Inc. (TSLA) on the back of high expectations for the Model 3, its mass-market electric car. In a note published this morning, analysts at the firm raised their price target for the car company to $439, implying an increase of approximately 23 percent from current trading prices. As of this writing, Tesla's shares are trading at $357.48. (See also: Tesla Makes Risky Moves in Model 3 Production.)

In their note, analysts Brad Erickson and Elliot Arnson stated that investor sentiment for the Model 3 was "hitting the moon." According to the Pacific Crest analysts, "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 fail." Despite a positive assessment of the Model 3, Pacific Crest maintained its Sector Weight rating for the car company because investors will return to evaluating Tesla on the basis of profitability. The Palo Alto, California-based car company has had very few profitable quarters, the most recent one being the quarter that ended last October. (See also: Is Tesla Losing Money Each Time It Sells A Car?)

That said, Tesla has ambitious plans for the future and intends to roll out 50,000 cars during the first half of this year. This past April, the company announced record deliveries of 25,000 cars during the first quarter. Production for the Model 3 is expected to start at the beginning of next month, and delivery of the first car will occur before the end of this year. In the run-up to the Model 3 launch, Tesla's stock has shot up by approximately 62 percent this year. The company also briefly overtook General Motors Company (GM) to become the world's most valuable car maker. Many Wall Street analysts are bullish on Tesla, with seven Buy, eleven Hold and six Sell ratings. (See also: Tesla Passes General Motors in Market Cap, Becomes Most Valuable Auto Maker.) 

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