Deutsche Bank: This ‘Had To Happen At Some Point’ (TSLA)

by Business Insider | October 3, 2013 3:13 pm

Yesterday, Tesla (TSLA[1]) shares fell 6.2%, and have continued to fall today — in part because of an analyst’s downgrade, but also perhaps in part because of a fiery car crash that raised concerns over the safety[2] of the electric vehicle’s lithium-ion battery.

In a note to clients (titled “Had to happen at some point; no change to the thesis”), Deutsche Bank analysts led by Dan Galves argue that this was inevitable.

“We expect that negative news flow and investor concern over the impact to demand of this incident will put negative pressure on the stock in the near-term,” write the Deutsche Bank analysts. “And these are meaningful concerns, as this is a new technology and one in which sensitivity to safety risk is very high.”

However, the Deutsche Bank team also offers a few reasons why damage to investor perceptions of Tesla vehicles’ safety should be mitigated:

“This incident does not change our positive thesis on the company or the stock,” concludes Galves. “Given significant Roadster and Model S experience (6 years, tens of millions of miles driven) without a fire, we have confidence that this is an isolated incident that could happen to any vehicle.”

Deutsche Bank has a buy rating on the stock and a price target of $200.

See Also:

Endnotes:

  1. TSLA: http://studio-5.financialcontent.com/investplace/quote?Symbol=TSLA
  2. fiery car crash that raised concerns over the safety: http://www.businessinsider.com/tesla-is-tanking-2013-10?utm_source=investorplace&utm_medium=referral
  3. Tesla Issues Statement On Fiery Car Crash That Caused The Stock To Tank: http://www.businessinsider.com/tesla-is-tanking-2013-10?utm_source=investorplace&utm_medium=referral
  4. Harry Reid Makes John Boehner An Offer On The Shutdown, And His Logic Is Spot On: http://www.businessinsider.com/government-shutdown-reid-makes-boehner-an-offer-2013-10?utm_source=investorplace&utm_medium=referral
  5. Tom Clancy Dead: Celebrated Thriller Author Dies At Age 66: http://www.businessinsider.com/tom-clancy-dead-celebrated-thriller-author-dies-at-age-66-2013-10?utm_source=investorplace&utm_medium=referral

Source URL: https://investorplace.com/2013/10/deutsche-bank-this-had-to-happen-at-some-point-tsla/