The deluge of recent negative media coverage on Tesla is missing the real story, according to one Wall Street firm.

Baird reiterated its outperform rating for Tesla shares, predicting the electric car maker will make significant progress in raising its Model 3 production volumes.

“Negative headlines have increased substantially in the past month and, in our opinion, increasingly immaterial reports have dominated news cycles,” analyst Ben Kallo said in a note to clients Wednesday. “We think we have hit a peak in negative coverage/sentiment, and believe shares could appreciate significantly with execution, which should coincide with an improvement in sentiment.”

The analyst reaffirmed his $411 price target for Tesla shares, representing 49.5 percent upside to Tuesday’s close.

Kallo predicts Tesla will eventually fix its production issues with the Model 3. He noted that production deliveries rose 83 percent annually since 2012 for its previous vehicles.

“Tesla has managed to successfully ramp production of the Model S and X, albeit on a slower timeline than initially expected,” he said. “While the Model 3 production delay is (rightfully) a focus for investors, we believe a six month production delay is minor over the long run.”

Tesla’s shares are down 11.7 percent year to date through Tuesday compared with the S&P 500’s 1.9 percent return. The company’s stock was down fractionally in Wednesday’s premarket session.

— CNBC’s Michael Bloom contributed to this story.