Shares of Tesla Motors, Inc. (NASDAQ: TSLA) have declined 11.08 percent over the last three months, with a low of $218.87 on August 24.
Barclays’ Brian A. Johnson has downgraded the company from Equal-Weight to Underweight, while lowering the price target from $190 to $180.
Johnson believes that the stock is currently overvalued and is not accounting for the challenges and risks associated with the company’s aim to transform into a mass-market OEM.
Analyst Brian Johnson believes that “crossing the chasm” is more difficult than it appears for Tesla Motors, despite the company’s “impressive set of products and early leadership in the field of vehicle electrification.”
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With negative datapoints emerging, Johnson expects the stock to remain challenges in the coming months.
First, the Model X rollout did not provide the expected “technical boost.”
“Launch events typically generate a run-up into the event, with some payback after. Yet last week’s X launch failed to boost the shares – indicating a lack of 'story'-driven buying support,” the Barclays report explained.
Johnson expects several factors to drive Tesla Motors’ margins below the current consensus forecasts, such as a slow production ramp and engineering difficulties leading to manufacturing hurdles.
The disappointing Model X launch also points towards the company meaningfully missing the 2015 delivery guidance. If the Model X ramp continues to be slow in 2016, “there may be little offset from Model S,” Johnson stated, while adding that “the slow X ramp calls into question whether Model 3 will launch on time.”
The Q4 and 2016 gross margin estimates have been lowered.
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