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Pacific Crest On Tesla: Musk's 'Vague' Model X Commentary 'Raises Risk To Numbers'

Pacific Crest On Tesla: Musk's 'Vague' Model X Commentary 'Raises Risk To Numbers'
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In a report published Wednesday, Pacific Crest analyst Brad Erickson maintained an Overweight rating on Tesla Motors Inc (NASDAQ: TSLA), with a price target of $293, saying that CFO Departure and CEO Elon Musk's commentary on the timing of Model X have "throw a bit of cold water" on the recent uptrend in the company's share price.

Tesla Motors has announced the retirement of CFO Deepak Ahuja, who would be staying on until a replacement is found. However, the company did not provide a timeline for this. "Given that the company could arguably be heading toward another capital raise before the end of the year, this is not likely to be a positive for sentiment," analyst Brad Erickson said.

In the report Pacific Crest noted, "While Mr. Musk's commentary around Model X launch timing was admittedly vague, expectations for deliveries to begin in "three to four months" raises the probability of risk to our estimates. We are modeling 1,000 Model X deliveries in Q3 and 4,000 in Q4. While the company has not shied away from exiting the year at 1,000 Xs and 1,000 Ss produced per week, we think our Q3 Model X number likely appears high if a best-case scenario has deliveries beginning mid-September."

Although the meeting with management did not boost confidence in the company, Erickson believes that the launch of Model X later this year "could catalyze shares higher," while expecting fundamentals to continue to be strong in the near term. Moreover the company's "longer-term earnings power remains underappreciated."

Latest Ratings for TSLA

Feb 2017Goldman SachsDowngradesNeutralSell
Feb 2017RBC CapitalMaintainsSector PerformSector Perform
Jan 2017Morgan StanleyUpgradesEqual-WeightOverweight

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