Market Overview

Tesla Oversold Amid AV Fears, But Still Not A Buy For KeyBanc

Share:
Tesla Oversold Amid AV Fears, But Still Not A Buy For KeyBanc
Related TSLA
Bitcoin Inverted Double-Head And Shoulders Pattern Spotted
Kandi Technologies Charges Higher, Reports NHTSA Approved 2 Pure Electric Vehicle Models
The Stock Market Stalls, But Trouble Still Looms On The Horizon (TalkMarkets)

Uber’s suspension of self-driving tests and investigation into a fatal crash have cast doubt on the future of autonomous vehicles.

The new narrative, coupled with a Model X fatality and Moody’s downgrade, has prompted a 17.8-percent sell-off in Tesla Inc (NASDAQ: TSLA) ― an overreaction as far as some analysts are concerned.

The Rating

KeyBanc analysts Brad Erickson and Elliot Arnson maintained a Sector Weight rating on Tesla with no price target.

The Thesis

KeyBanc considers Tesla’s stock oversold in the near term.

“How can we possibly say this is oversold given all the concerns? Because people love the cars and the CEO is Elon Musk,” Erickson and Arnson wrote in a note.

Shorting the stock can only be justified by expectations of demand declines or Tesla’s conceded ability to raise capital. KeyBanc wouldn’t bet on those circumstances.

The analysts’ channel checks indicate Model 3 deliveries are ramping, and although the segment continues to track below the targeted rate of 2,500 per week, it appears on pace to meet KeyBanc’s 8,500 quarterly estimate.

“Finally, we think the Model 3 backlog continues to grow while conversion is not proving disappointing thus far as many investors seem to think,” the analysts wrote.

Long-term, KeyBanc considers investors overly optimistic about Tesla’s ostensible leadership in automotive innovation, particularly amid the risk of recurrence of this week’s events.

Price Action

Tesla traded up about 1 percent to $260.25 in Thursday's pre-market session.

Related Links:

Fatalities Will Decline With Autonomous Vehicles, Gene Munster Says After Uber Incident

Nvidia To Halt AV Fleet Testing As Uber Investigates Fatal Crash

Latest Ratings for TSLA

DateFirmActionFromTo
Feb 2019Canaccord GenuityUpgradesHoldBuy
Feb 2019Morgan StanleyMaintainsEqual-WeightEqual-Weight
Jan 2019UBSReiteratesSell

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings

Posted-In: autonomous vehicles Brad Erickson Elliot Arnson KeyBancAnalyst Color Reiteration Top Stories Analyst Ratings Best of Benzinga

 

Related Articles (TSLA)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
DOBarclaysUpgrades0.0
OIIBarclaysUpgrades0.0
RIGBarclaysUpgrades0.0
CTLRBC CapitalDowngrades0.0
ECLJP MorganDowngrades167.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Bank Of America Turns Bearish On GameStop, Sees Too Many Headwinds

26 Stocks Moving In Thursday's Pre-Market Session