Tesla Inc TSLA 0.57% is one of the most polarizing stocks in the market. Baird analyst Ben Kallo is among the most optimistic Tesla bulls. On Monday, Kallo reiterated his Overweight rating for Tesla and raised his price target for the stock from $368 to $411. He also issues a word of warning for the all the Tesla short sellers out there, and there are plenty of them.
According to Kallo, shorting Tesla is a dangerous game at this point.
“In our opinion, TSLA is not a good short headed into the Model 3 ramp as we continue to believe upcoming catalysts will drive shares higher, and TSLA remains a top pick for 2017,” Kallo wrote (see his track record here).
Despite the fact that Tesla stock is up another 71.0 percent in 2017, financial analytics firm S3 Partners reported earlier this month that Tesla is the single most heavily-shorted American company in the market, with more than $9 billion in short interest.
Kallo says those short sellers will be in for some pain in the months ahead. Not only does he see the Model 3 living up to the hype, he suggested global demand for the vehicle may actually end up larger than anticipated. Tesla CEO Elon Musk has said the Model 3 alone could eventually account for 700,000 vehicles of demand per year.
Kallo also addressed Tesla’s cash problems, the primary concern for many short sellers. He said…
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