Why Recent Headlines Don't Change Goldman's Long-Term View On Tesla
Although recent news surrounding Tesla Motors Inc (NASDAQ: TSLA) has been negative, they do not impact the long-term view on the company, Goldman Sachs’ Patrick Archambault said in a report. The analyst has a Buy rating on the company, with a price target of $240.
On June 30, Tesla announced that the National Highway Traffic Safety Authority, or NHTSA, was conducting an investigation of the first autopilot fatality that had occurred on May 7 in Florida. This was followed on July 4 by news of an autopilot crash in Pennsylvania, albeit non-fatal, analyst Patrick Archambault mentioned.
Tesla also announced its delivery and production momentum in 2Q16. The current production/delivery ramp for Model X seems to be tracking lower than was previously estimated. Archambault reduced the EPS estimate for 2Q16 to -$0.66, significantly below the consensus of -$0.34.
No Change To Thesis
Although these events are negative, the Tesla thesis had not changed. While the outcome of the NHTSA’s investigation is uncertain, “we would expect Tesla’s AV program to continue given we believe there are steps Tesla can take that would theoretically make autopilot safer,” the analyst wrote.
Citing Tesla’s 2Q16 production miss, Archambault commented that “perfection was never priced into the shares in our view.” Investors had been anticipating a guidance reduction, which means that any positive news on Model X production would lend support to Tesla’s shares.
Latest Ratings for TSLA
|Jan 2017||Guggenheim||Initiates Coverage On||Buy|
|Oct 2016||Goldman Sachs||Maintains||Neutral|
|Oct 2016||Goldman Sachs||Downgrades||Buy||Neutral|
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