Barclays Names These Tesla Challenges

Brian Johnson of Barclays on Thursday commented in a note that

fourth quarter print "validated" concern that "crossing the chasm is tougher than it looks." "Last week we caught the ire of Tesla bulls by lowering our estimates based on concerns about production delays and rising opex and capex," Johnson wrote. "The fourth quarter print validated many of these concerns." Johnson notes that Tesla missed its fourth quarter deliveries and guided "softly" for the first quarter. The analyst adds that ZEV credits "artificially" boosted its results, opex grew faster than expected and capex was guided well ahead of his already conservative model. Johnson recommends investors not to get "caught up" in any positive looking forward guidance and to "focus on what's in front of us." The analyst suggests that investors consider "if Tesla is having trouble meeting near-term targets, how can they meet long-term targets." Bottom line, the fourth quarter print was yet another reminder of the challenges the company faces including below than expected deliveries, a soft gross margin and "disappointing" first quarter and full year fiscal 2015 guidance. Shares remain Equal Weight rated with a price target lowered to $190 from a previous $200, based on new assumptions which include lower margins, 45,000 deliveries in 2015 (versus 55,000 guidance) and net income (-$131 million versus guide of up versus 2014's $20 million).