Market Overview

BofA Remains 'Skeptical' On Tesla Model 3 Production After Investor Meetings, Expects Capital Raise

Share:
BofA Remains 'Skeptical' On Tesla Model 3 Production After Investor Meetings, Expects Capital Raise
Related TSLA
Bulls & Bears Of The Week: Apple, Ford, Nike, Verizon And More
Elon Musk Talks GM, Marijuana And More In '60 Minutes' Interview
Right Back Where the Stock Market Started, But Worse (TalkMarkets)

Even a day with Tesla Inc (NASDAQ: TSLA)’s senior director of investor relations couldn’t assuage one of the Street’s most bearish analysts.

The Rating

Bank of America Merrill Lynch analyst John Murphy maintained an Underperform rating on Tesla with a $180 price target in a Wednesday note. 

The Thesis

Murphy regards Tesla’s construction of a Shanghai factory “prudent” in helping evade tariffs and penetrate a significant global market. What’s more, he concedes that Tesla’s benefiting from a vacuum in the electric vehicle market, even as competition rises on all sides. (See the analyst's track record here.) 

But the BofA analyst remains unconvinced that Tesla will sustain and continue to raise production rates.

“Although TSLA is confident in the sustainability of its production rate, based on its past challenges in ramping up production, we remain somewhat skeptical and believe it will take some time before the Model 3 production reaches material scale." 

Despite Tesla’s claims to the contrary, Murphy expects the slow Model 3 ramp and accompanying cash burn to necessitate a near-term capital raise.

Price Action

Tesla shares were down 1.09 percent at $318.96 at the close Wednesday. 

Related Links:

Barclays: Tesla Sell-Off Could Continue Into Earnings, But Watch For A 'Bear Trap' In Q2 Report

Elon Musk Takes Aim At Media Again As Tesla's Stock Moves Lower

Photo courtesy of Tesla. 

Latest Ratings for TSLA

DateFirmActionFromTo
Dec 2018JefferiesUpgradesHoldBuy
Oct 2018Canaccord GenuityMaintainsHoldHold
Oct 2018JMP SecuritiesInitiates Coverage OnMarket Outperform

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings

Posted-In: Bank of America Merrill Lynch John MurphyAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (TSLA)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
BAPItau BBAUpgrades274.0
DVNJP MorganDowngrades37.0
EOGJP MorganUpgrades118.0
EQMBarclaysDowngrades48.0
EXPDGoldman SachsDowngrades68.0
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.

How Lossless Cannabis Activation Allows Users To Access All Of A Strain's Properties

Stifel Raises Netflix Price Target Ahead Of Q2 Print