Goldman Sachs analyst Patrick Archambault issued a new note to clients this morning to announce that he raised his price target on Tesla (TSLA) to $245.00 from $202.00 citing Model 3 orders which are reportedly approaching 400,000.

Tesla’s stock opened up over 1% this morning, even though Archambault’s updated price target is below the current trading price and he maintains his “neutral” rating.

The analyst highlighted three points in his new note (via StreetInsider):

Assess the competitive positioning of Tesla’s product portfolio. While some have argued that the Model 3 demand is more about the cachet of a new Silicon Valley brand than electrification, it’s somewhat helpful to know that the model does screen very well relative to existing and planned EVs on price per unit of range.

Benchmark our volume base case for each Tesla model against segment leaders within each relevant category. This has the impact of driving up our Model 3 estimates, offset by a slight reduction for Models S and X.

Revisit our well-to wheels analysis of various fuel types including EVs under the current low gas price environment.

Archambault is citing risks to Tesla’s free cash flow burn, Model X orders, and Model 3 execution as reasons why he is maintaining his neutral rating.

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