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Shares of Tesla Inc. (TSLA - Free Report) plunged more than 5% in early morning trading hours Wednesday after a new report from Goldman Sachs expressed concern over the company’s sluggish sales growth.
“We remain sell rated on shares of TSLA where we see potential for downside as the Model 3 launch curve undershoots the company's production targets and as 2H17 margins likely disappoint,” said Goldman analyst David Tamberrino in a note.
Tamberrino lowered his price target for Tesla to $180 per share from $190, which would represent a drop of nearly 50% from Monday’s close. The analyst also noted that Tesla’s second-quarter deliveries missed his estimates, and he slashed his annual growth projection to 5% through 2021—down from his previously projected 13% growth rate.
Tesla blamed its second-quarter deliveries miss on a temporary production issue with its 100 kilowatt-hour battery packs, but Tamberrino clearly thinks the problem extends further than a short-term problem. In fact, today’s note mentioned that demand for Tesla’s existing models, the Model S and Model X, was “plateauing.”
Despite some disappointing earnings and vehicle delivery results, shares of Tesla have skyrocketed nearly 70% year-to-date. Nevertheless, for those that remain cautious on the stock, the company’s actual performance has created a plethora of unanswered questions.
Excitement over the launch of the Model 3 has fueled the optimistic trading, but if the rollout doesn’t go smoothly, Tesla could be in even bigger trouble.
For now, TSLA remains a Zacks Rank #3 (Hold).
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Here's Why Tesla (TSLA) Stock Is Sinking Today
Shares of Tesla Inc. (TSLA - Free Report) plunged more than 5% in early morning trading hours Wednesday after a new report from Goldman Sachs expressed concern over the company’s sluggish sales growth.
“We remain sell rated on shares of TSLA where we see potential for downside as the Model 3 launch curve undershoots the company's production targets and as 2H17 margins likely disappoint,” said Goldman analyst David Tamberrino in a note.
Tamberrino lowered his price target for Tesla to $180 per share from $190, which would represent a drop of nearly 50% from Monday’s close. The analyst also noted that Tesla’s second-quarter deliveries missed his estimates, and he slashed his annual growth projection to 5% through 2021—down from his previously projected 13% growth rate.
Tesla blamed its second-quarter deliveries miss on a temporary production issue with its 100 kilowatt-hour battery packs, but Tamberrino clearly thinks the problem extends further than a short-term problem. In fact, today’s note mentioned that demand for Tesla’s existing models, the Model S and Model X, was “plateauing.”
Despite some disappointing earnings and vehicle delivery results, shares of Tesla have skyrocketed nearly 70% year-to-date. Nevertheless, for those that remain cautious on the stock, the company’s actual performance has created a plethora of unanswered questions.
Excitement over the launch of the Model 3 has fueled the optimistic trading, but if the rollout doesn’t go smoothly, Tesla could be in even bigger trouble.
For now, TSLA remains a Zacks Rank #3 (Hold).
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2%, respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>