JPMorgan downgrades Tesla on delivery troubles

Friday, 29. March 2019 14:12

The price target for Tesla Inc. was set at $215 per share in an update by JPMorgan on Friday. The lender's analyst Ryan Brinkman attributed the decrease from $230 to concern over the delays in deliveries of Model 3 to Europe and China and added the maker of electric cars has been graded underweight for three years. Ahead of next week's shipment figures, he also lowered the estimate for the vehicle to 50,000 from 55,000.

"Even modest" underperformance in the first quarter implies "a disproportionately material impact" on results, the statement adds. The investment bank noted it expects Tesla to suffer a loss on a reported basis, in line with the automotive giant's warning. Overall deliveries were estimated at 70,500, a cut by 5,000, with expected adjusted earnings per share cut to $0.38 per share from $0.94. It drew a decrease in the full-year figure to $4.25 from $4.5 per share, while the forecast for 2020 was slashed by 25 cents to $6.75 per share, the analyst told clients.

He added the market for the manufacturer's vehicles in Europe may be bigger than in the United States but that "some countries" lag behind. Brinkman also expressed belief average prices of Model 3 have passed their peak. Tesla was marginally higher in premarket trade. Yesterday it closed at $278.62 per share, down 16.28% year to date, compared to growth of 15.65% in the benchmark Nasdaq 100 index.

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