Back to top

Analyst Blog

Tesla Motors, Inc. (TSLA - Analyst Report) might become an acquisition target in 2014, if media reports are to be believed. According to market speculation, one of the “Big Three" Detroit automakers may purchase the electric carmaker. One veteran trader reportedly said that General Motors Company (GM - Analyst Report) might acquire Tesla in 2014.

However, the news remains mere speculation as none of the automakers have clarified these rumors. In fact, it is yet to be confirmed whether Tesla CEO Elon Musk is willing to sell the company. Moreover, the high valuation of Tesla is likely to prove a hitch.

However, the acquisition of Tesla can be a good strategic move for General Motors. While the latter is one of the largest automakers in the world, it has not been very successful in terms of selling electric cars. General Motors’ Chevy Volt had sales volume of less than 19,000 units in the first 10 months of 2013. This implies a year-over-year decline of 3%. Moreover, the car has been experiencing fire-related problems.

Meanwhile, Tesla’s Model S car has been immensely popular. In fact, the demand for the car exceeds supply despite no advertising by the company. On the other hand, both General Motors and Ford Motor Co. (F - Analyst Report), the manufacturer of Ford Focus Electric vehicles, spend significant amounts on discounts to attract buyers. Yet, Ford’s electric car has monthly sales volume of less than 200 units.

Tesla currently has a Zacks Rank #4 (Sell), while General Motors carries a Zacks Rank #3 (Hold). However, a better-ranked stock in the automobile market worth considering is Honda Motor Co., Ltd. (HMC - Analyst Report), carrying a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
QIHOO 360 T… QIHU 91.70 +4.02%
VIPSHOP HOL… VIPS 198.41 +3.69%
GENTIVA HEA… GTIV 16.39 +3.60%
COMPUGEN LT… CGEN 9.19 +3.49%
CALLON PETE… CPE 11.26 +2.93%