JPMorgan Cuts Price Target on Tesla (NASDAQ:TSLA)

JPMorgan Cuts Price Target on Tesla (NASDAQ:TSLA)


FLASH: Tesla still have deliver issues.

JPMorgan (NYSE:JPM) analyst Ryan Brinkman cut his price target for shares of the EV maker Friday to 215 a share from 230. The 215 price target is 22.6% below the stock’s current mark. The shares bounced back from lowered pre-market trading to close up .45% Friday to 279.86.

Mr. Brinkman reiterated his underweight rating on Tesla

“Q-1 results are particularly susceptible to potential delays in delivering Model 3s to customers in Europe and China,” Mr. Brinkman wrote in a note out Friday morning. “Any delays in delivering vehicles to Europe and China carry the potential for a disproportionate impact on Q-1 deliveries (and, hence, revenue, margin, and cash flow), given the already guided back-end-loaded nature of Q-1 deliveries.”

Tesla management had experienced delays in getting cars to Chinese customers. China has emerged as a Key market for Tesla, as rising competition in the EU and somewhat in the US has put pressure on the stock.

What’s worse is that Mr. Brinkman believes M-3 average selling prices are likely to decline. “Our own estimate is that Model 3 ASPs are likely to have peaked in Q-4,” he wrote. Recently, analysts have noted that a heavier reliance on the lower-priced M-3 sales will pressure margins, so if the price of those cars drop, that could be especially damaging.

Mr. Brinkman lowered his delivery estimates for the upcoming reported quarter to 50,000 from 55,000. He also reduced his adjusted EPS estimate for Q-1 to 38c from 94c, and his 2019 EPS estimate to 4.25 from 4.50. He expects Y 2020 EPS to come in at 6.75, down from an initial forecast of 7.

HeffX-LTN’s overall technical analysis for TSLA is Bearish in here, as there is now support under 263/share.

Have a terrific weekend

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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