Analysts at CLSA Americas downgraded Tesla Motors Inc TSLA from Outperform to Underperform, discounting its price target by $55 to $220 –- still above current prices.
While the analysts explained that near-term, the stock will underperform, the "patient investor" might still find the current price attractive.
CLSA downgraded the stock based on lower-than-expected Model X margins, recent execution issues, and investor concerns around product demand. Model S margins are also more dilutive than previously thought, the analysts said.
Don't Give Up On China
On the long-term side, CLSA said investors should not give up on China just yet. Looking forward to 2016, China should come into focus, while the Model S will be added to the city of Shenzhen's new energy vehicle incentive program.
Xinhua, the Chinese government news agency, will also be using the Model S as media vehicles.
Tesla recently traded at $198.50, down 1.5 percent in the pre-market.
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