(This story is for CNBC PRO subscribers only.) Jefferies upgraded shares of Tesla to a buy rating on Monday, saying the company is "leading the industry's technological transformation" and stands to benefit from further adoption of electric vehicles. The firm noted that Tesla can double its market coverage with the Model Y, and forecasts volume growth of more than 25%. Analyst Philippe Houchois said earnings and free cash flow should be supported by "better productivity," although he did lower his target on the stock to $650 from $800. The new target is 29% above where the stock currently trades. Last week, Tesla reported that it delivered approximately 88,400 vehicles in the first quarter of 2020, beating expectations. Analysts had expected about 79,900 as of Wednesday, according to a survey by FactSet. Jefferies noted that the number was "solid" despite "intra-Q seasonability." Shares of the automaker have gained 15% this year, outperforming the S & P 500's 23% decline. Looking ahead, Houchois expects the electric vehicle market to grow after the coronavirus pandemic passes. "Post-crisis we would assume higher consumer support to energy efficient transport," he said. Shares of Tesla gained 7.55% on Monday. - CNBC's Michael Bloom and Lora Kolodny contributed reporting.
Robots work on a Tesla Model X in the Tesla factory in Fremont, California in 2018.
Jefferies upgraded shares of Tesla to a buy rating on Monday, saying the company is "leading the industry's technological transformation" and stands to benefit from further adoption of electric vehicles.