Wednesday, July 18, 2012

Tesla: Wunderlich Cuts To Sell; Says Q3 Forecasts At Risk (TSLA)

The stock is down 1.65% at $32.80. I don't know if the muted reaction is due to an underappreciation of Wunderlich's analysis or something else.
As I said in June's "What is Tesla Motors Worth? (TSLA)":
Although it is smack dab in our Energy/Policy/Alt wheelhouse we have very few posts on Tesla.
On a personal level I didn't have much interest in government subsidized $100K playthings.
On the other hand, as an investment the stock always seemed to be in stronger hands* than the battery companies or other fashion-forward issues, poo-pooing it didn't seem like good advice for our readers.
So I didn't post much on TSLA.

The stock is down 25% from the $39.95 all-time high it hit back March 30 showing that it is not some irresistible force of nature and a very interesting look at the valuation arrived in yesterday's email....MORE
Here's the latest from Eric Savitz at Forbes:
Wunderlich Securities analyst Theodore O’Neill this morning reduced his rating on Tesla Motors to Sell from Buy, with a new target of $28, down from $49. The stock closed yesterday at $33.35. The analyst writes that his change of heart reflects production cuts for the company’s new Model S sedan.

He notes that the stock has fallen of late from a recent peak of $36 a combination of profit taking and “the growing realization that Q3 estimates are at risk, with production likely coming in at the low end of the range.”

O’Neill notes that the company is sticking to its 5,000 unit forecast for 2012, but that how it gets there “becomes a second issue for it to resolve.” The analyst says that Tesla “is doing everything right from a business perspective and has demonstrated superiority of design,” but that the market may pause to see how it handles the execution, allowing the shares to retrace the year’s gains.”...MORE