Tesla Inc. (NASDAQ:TSLA) plunged more than 5% in early trading hours Wednesday after a new report from Goldman Sachs expressed concern over the company’s sluggish sales growth. While TSLA stock remains up in 2017, the sign is disturbing for Tesla Inc. investors.
“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 about TSLA stock.
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 for TSLA stock.
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 for TSLA, shares of Tesla stock 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).
