Analysts are downgrading Tesla’s stock rating to sell and the company’s stock price has taken a hit.
Earlier this month, Pacific Crest analyst Brad Erickson downgraded the American electric automaker’s stock to sector weight from overweight, meaning Erickson believes the stock will perform in line with other stocks he covers in the next six to 12 months. Now, Tesla’s stock has dropped over four percent in active premarket trade today, after analyst Colin Langan downgraded his rating to sell. Since April 2014, Langan had a neutral rating for Tesla stock, but now he has also cut his stock price target to $210 from $220.
According to Langan, Tesla stock is pricing deliveries of over 1.5-million vehicles in 10 years and full utilization of its storage capacity, but he believes that Tesla’s “current planned 15GWs of storage capacity may be larger than the market in 2020.” In addition, he added that Tesla’s production of the Model X starting in the third quarter will increase production complexity, potentially causing delivery targets to be missed.
Tesla’s stock has risen over 35 percent in the past three months and closed yesterday at $282.26, nearly close to its record high of $286.04 on September 4, 2014.
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