Goldman Sachs Downgrades Tesla To Sell, Sees 28% Downside
Tesla Inc (NASDAQ: TSLA) is currently ahead of its OEM peers in terms of “vehicle technology adoption, electric vehicle architecture, and (potentially) battery scale,” Goldman Sachs analyst David Tamberrino said in a report. He added, however, the company’s shares could come under pressure due to a delay in the Model 3 launch and high FCF [free cash flows] burn rate.
Tamberrino downgraded the rating on Tesla from Neutral to Sell, while reducing the six-month price target from $190 to $185. He stated the revised price target represented 28 percent downside, versus 8 percent downside for peers.
Near-Term Concerns
Some suppliers had expressed concern that the final designs of Model 3 had not been locked down, Tamberrino mentioned. A delayed launch could severely impact volume and the FCF burn rate would necessitate a capital raise before Q4 2017.
Related Link: Tesla Beats Q4 Sales Estimates, Global Orders Up 49%
“We expect to see pressure on shares as we progress through the year, as cash burn intensifies and the ramp of Model 3 volumes proves to be slower and flatter than assumed in guidance/consensus,” the analyst commented.
Referring to the acquisition of SolarCity Corp (NASDAQ: SCTY), Tamberrino commented that the business model was unproven and was undergoing a transition, and that Tesla should have been “singularly focused on becoming a mass automobile manufacturer.”
Tesla's stock was trading down by more than 2.5 percent at $250.25 in Monday's pre-market session.
Latest Ratings for TSLA
Date | Firm | Action | From | To |
---|---|---|---|---|
Feb 2021 | Morgan Stanley | Maintains | Overweight | |
Feb 2021 | Piper Sandler | Maintains | Overweight | |
Jan 2021 | Deutsche Bank | Maintains | Buy |
View More Analyst Ratings for TSLA
View the Latest Analyst Ratings
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