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Analyst Imagines A Year's Worth Of Tesla Tweets From Musk

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January 4, 2017 10:36 am
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Tesla Motors Inc (NASDAQ: TSLA) stock is expected to be range bound in the near term, with the upcoming Gigafactory event likely to be a positive, and the Q4 EPS miss and capital raise may keep the stock in check, Barclays’ Brain A. Johnson said in a report. He added that the stock may correct later, on a Model 3 delay.

Johnson maintains an Underweight rating on Tesla, with a price target of $165. He mentioned four tweets that could be expected from CEO Elon Musk in 2017 related to “items investors cared about.”

Tweets Expected

Tweet 1: “Great progress so far on Model 3, but still have a number of tweaks ahead — thus will take a little longer than expected.”

Tesla is likely to announce a Model 3 delay, given the “high risk of execution missteps, a challenged track record on meeting timelines, cost challenges, and potential impact from an otherwise full plate of initiatives in ’17,” Johnson wrote

Tweet 2: “Time to derisk a capital raise.”

The analyst assumed a $1.5 billion capital raise in Q1 2017, while noting that the company had a track record of cash burn and that the markets may not be as accommodating as it had been previously to a capital raise being undertaken to fund operating losses.

Tweet 3: “Slowing the growth at SolarCity until regs more favorable.”

Johnson expects Tesla to “significantly reduce” growth at SolarCity Corp (NASDAQ: SCTY) and try to “manage it to be a neutral so that it doesn’t impact its other initiatives.”

Tweet 4: “We don’t need EV subsidies, but we should get some $ for all the U.S. employment we create.”

Since Musk is now part of President-elect Donald Trump’s Strategic & Policy Forum, it may make sense for him to “leverage Tesla’s position as the only automaker with effectively all of its manufacturing in the U.S.,” the analyst concluded.

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