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Tesla Closes Below $200 As Analysts Roll Out Grim Bear Scenarios

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Tesla Closes Below $200 As Analysts Roll Out Grim Bear Scenarios

Tesla Inc (NASDAQ: TSLA) shares lost voltage Wednesday after being hit by a one-two punch: another major Wall Street firm saying it sees an increasing chance of a bear scenario in which the share price drops to double-digits — and a longtime Tesla supporter expressing serious doubts about the company's trajectory in a private client call.

The stock dropped beneath $200 for the first time in three years Monday and was below that level at the close Wednesday, ending the session down 6.02 percent at $192.73.

Citi's $36 'Full Bear' Scenario

Citi analyst Itay Michaeli maintained a Sell rating on Tesla and cut the price target from $238 to $191.

The probability of the automaker reaching a "full bear" scenario of a $36 share price has increased from 35 percent to 40 percent, the analyst said.

Citi views Tesla's risk-reward profile as negatively skewed largely due to demand and free cash flow concerns, CNBC said.

Analyst: Debt Is The Headline Now

Morgan Stanley analyst Adam Jonas said in a private client call Wednesday the Tesla of today is in a much more difficult position than in the fourth quarter of 2018, according to Business Insider, which said it obtained a copy of the call.

Tesla is no longer a growth story, Jonas reportedly told clients: "It's a distressed credit story."

While Jonas said he's still a believer in Tesla's autonomous technology, he said its leverage is untenable.

If Tesla sells about 250,000 cars this year, as Jonas projects, it will need either a massive capital injection by 2020 or will be "seeking strategic alternatives," the analyst said.

Jonas on Tuesday reiterated an Equal-Weight rating on Tesla with a $230 price target, but slashed the bear case price target from $97 to $10.

Related Links:

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Photo courtesy of Tesla.

Latest Ratings for TSLA

DateFirmActionFromTo
Jun 2019ReiteratesSell
Jun 2019UpgradesNeutralBuy
May 2019MaintainsUnderweight

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings

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