All of the focus may be on Tesla Inc.'s (TSLA) potential quest to go private, but production of the Model 3 sedan still matters. And judging from Wall Street firm Evercore ISL, the green car maker is progressing on that front.
Coming off a two-day trip to Tesla’s Fremont, California plant, Evercore analyst George Galliers said he is becoming more positive on the company’s prospects and believes the company is well on its way to reaching production of 5,000 to 6,000 Model 3 sedans each week. What’s more, the analyst said in a research note that was covered by StreetInsider.com and CNBC the capital expenditures needed to hit 7,000 to 8,000 vehicles each week appears to be within Tesla’s reach. "While, we forecast H2 Model 3 production of 123k units, following our trip, we believe our estimate could be 4 to 7% too low," wrote the analyst in the research report. (See more: Tesla Made 6,000 Model 3's in June.)
Evercore More Positive On Tesla
Galliers was particularly bullish about the stamping facility at Tesla saying in the note that it met or exceeded all the benchmarks Evercore was looking for. "Focusing on the fundamentals and setting aside talk of privatization, we are incrementally positive on Tesla following our visit," the analyst wrote. Evercore has an inline investment rating on Tesla and a price target of $301. With the stock closing Wednesday’s trading session at $338.69, Evercore expects it to decline more than 10%.
In late June, Tesla reached another milestone: its Model 3 sedan cracked the top 10 list for best-selling passenger cars for the month of July. According to Goodcarbadcar, which analyzes sales data for the automobile industry, during the month of July, Tesla sold 14,250 Model 3 sedans, with it selling 38,617 year-to-date.
SEC Subpoenas Tesla
While Evercore is focusing on the production rate at Tesla, much of the rest of the world is looking at the blowback from CEO Elon Musk’s choice last week to tweet that he has secured financing to take Tesla private in a $420 a share deal. (See more: Tesla Board To Musk: Stop Tweeting!) That tweet raised the ire of investors and analysts and prompted an inquiry by the Securities and Exchange Commission. Earlier Wednesday Fox Business reported the Securities and Exchange Commission’s San Francisco office subpoenaed Tesla in regards to its privatization plans, as well as Musk's statement, in order to determine whether or not the CEO intentionally misled investors.