Cars and Drivers

Analysts Voting With Their Feet After Tesla's Earnings

Paul Ausick

Published: July 25, 2019 11:20 am

Last Updated: January 30, 2020 6:05 pm

Tesla Inc. (NASDAQ: TSLA) posted a much larger than expected net loss in the second quarter, and while that may be the biggest reason shares are getting pummeled Thursday morning, it’s not the only reason.

The company’s gross margins in its automotive business were a bit short of expectations, and the volume increase has been widely attributed to lower prices and what many analysts and investors see as a business that lives and dies with government subsidies. Turn the subsidies off and car buyers look again at fossil-fuel-powered cars for which subsidies are well-disguised and still in place.

The scoreboard for Tesla is decidedly negative Thursday, as five of 11 recent analyst calls show Sell ratings on the stock, and two more lowered their ratings following Wednesday’s announcement.

Here’s analyst reaction since late Wednesday:

• Credit Suisse maintained its Sell rating and set a price target of $189 per share.
• Goldman Sachs kept its Sell rating and its price target of $158 per share.
• Royal Bank of Canada maintained a Sell rating and set a price target of $190 per share.
• Wedbush reiterated its Hold rating and $230 per share price target.
• Canaccord Genuity reiterated its Buy rating and lowered its target from $394 to $350 per share.
• Nomura lowered its rating to Neutral and dropped its price target from $300 to $270.
• Barclays reiterated its Underweight rating and a price target of $150 per share.
• Oppenheimer maintained its Outperform rating but lowered its target from $437 to $356 per share.
• JPMorgan Chase maintained a Sell rating and set a price target of $200 per share.
• Nord/LB kept its Sell rating and set a price target of $200 per share.
• CIBC reiterated an Outperform rating and lowered its target from $437 to $356 per share.

Tesla’s stock traded down nearly 13% Thursday morning, at $230.70 in a 52-week range of $176.99 to $387.46. The consensus 12-month price target on the stock is $263.55, but these recent changes may not yet be priced in.