Tesla Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of electric car specialist Tesla Motors (NAS: TSLA) were zooming ahead today, gaining as much as 12% in intraday trading after a Wall Street upgrade.

So what: Analyst Theodore O'Neill of Wunderlich Securities was behind Tesla's zippy performance today, as he upgraded the company's stock from hold to buy and boosted his price target for the shares from $30 to $49. The jolt of optimism came after O'Neill toured Tesla's Fremont, Calif., facilities and realized that management's production goals for 2012 aren't nearly as aggressive as he'd previously assumed. In fact, O'Neill posited that there's "no reason from a production standpoint why it can't immediately ramp to 5,000 cars per quarter."

Now what: Undoubtedly that's a great vote of confidence and a nice price-target boost -- O'Neill's $49 target suggests that there's still 30% of additional upside even after the jump in the stock price today. On the flip side, though, it's key for investors to bear in mind that this is just the view of a single analyst. While it's worthwhile to take O'Neill's bullish take into account when formulating your own thesis on Tesla, jamming down the buy button on the basis of just a single analyst viewpoint is not a Foolish way to go.

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At the time thisarticle was published Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. Motley Fool newsletter services have recommended buying shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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