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Tesla's stock run just beginning: Analyst

Bruno J. Navarro

Shares of Tesla (TSLA) could more than double within the next three to four years, Dan Galves of Deutsche Bank said Wednesday.

"We feel like the company has a strong advantage in electric vehicles, and that's likely to be sustained over the long-term, so we see a lot of volume growth over the next few years and profitability being very strong," he said.

Shares of Tesla were up nearly 300 percent year to date.

Tesla was expected to release its second-quarter earnings report after the stock market close.

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On CNBC's " Fast Money ," Galves said that he was taking a long-term view on the stock, on which he held a $160 price target.

"Our price target is based on earnings and volumes that aren't likely to come until near the end of the decade, once Tesla brings out its next-generation vehicle, which is a lower-priced vehicle," he added. "We base our valuation target on earnings, and three or four years from now we think that this company can do about $14 of EPS on 200,000 units near the end of the decade."

Galves added that sales of 200,000 automobiles would still only represent a small fraction of the potential market.

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"That's only one-quarter of 1 percent of the global automotive market, so we see a lot of growth past that because Tesla, we think, has brought out a vehicle that takes advantage of the inherent advantages in electric vehicles, and nobody else is doing that right now," he said.

In response to a question about why he had a "buy" rating on Telsa stock, Galves added that he was also bullish on General Motors (GM).

"But I think you have to look at the growth trajectory and profitability in this market," he said. "It's very difficult to find auto companies that can do margins that are above the average, well above the average, and we think that there's a lot of things about Tesla that's going to support that for a long time."

- By CNBC's Bruno J. Navarro . Follow him on Twitter @Bruno_J_Navarro.

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