Bank of America Reiterates on Tesla Motors as Investors Appear Increasingly Spooked in October
In a report published Wednesday, Bank of America analyst John Lovallo II reiterated an Underperform rating and $45.00 price target on Tesla Motors (NASDAQ: TSLA).
In the report, Bank of America noted, “We have written extensively on our view that Tesla's shares are vastly overvalued from a fundamental standpoint in reports such as 300K reasons to have doubt and Caution: Oversize Load implied in current share price. We have also expressed concern that retail investors could ultimately be at risk, as institutional ownership of Tesla shares continues to wane (see Mom, Pop, & the Gen 3 dream). Thus far we have largely been howling at the moon, but believe it is worth considering what could occur when sentiment behind a momentum driven stock shifts. This appears to be slowly occurring, driven by factors such as the recent Model S battery fire and potential NHTSA probe, and speculation of a slowdown in the company's European expansion. In fact, TSLA shares are down roughly 12% from their 9/30 closing price of just over $193/sh. While the recent decline pales in comparison to the year-to-date hyperbolic growth of the shares, it could foreshadow emerging cracks in the seemingly ironclad façade surrounding Tesla's stock.”
Tesla Motors closed on Tuesday at $171.54.
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