Tesla is on track to snap a 6-day losing streak even as analysts' concerns mount (TSLA) - Business Insider

Reuters/Bobby Yip; Business Insider/Dave Smith

• Tesla shares turned higher on Thursday after selling off in early trading.
• Shares jumped 2%, though they were still trading near their lowest level in 2 1/2 years.
• The stock is coming off a six-day losing streak, fueled by analysts and investors' concerns about underlying demand, a worry that's plagued the stock for months.
• Watch Tesla trade live.

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Tesla's recent sell-off abated Thursday as shares turned higher after a six-day bloodbath. They hit a low of $186.23, their weakest since December 7, 2016, before jumping 2%.

The stock's losses over the past week came amid a slew of major Wall Street firms lowering their earnings expectations, price targets, and so-called bear-case targets.

Analysts' urgent commentary, paired with its former largest institutional shareholder dumping most of its stake, reflects a particularly troubling time for the electric-car maker that has long divided the investment community.

Read more: The investment giant that was once Tesla's biggest Wall Street backer cut its stake in half last year. Now it's dumped most of what was left.

Even the Baird analyst Ben Kallo, long one of the biggest Tesla bulls on Wall Street, earlier this week lowered his earnings expectations for the automaker and cut his price target for the second time in as many months. He maintained his "outperform" rating.

"Demand concerns, credibility questions, and messaging/communication (including a recent email announcing 'hard core' cost cuts) have weighed on TSLA shares in recent weeks, and we think it could take several weeks/ months for the narrative to shift," Kallo told clients on Tuesday, adding that the company's shareholder meeting in June could prove to be a catalyst for shares.

In the past week, analysts at Citi, Bank of America Merrill Lynch, Wedbush, and Morgan Stanley have all released scathing commentary about the automaker.

The Morgan Stanley analyst Adam Jonas, who has been neutral on the stock for two years, reduced his bear-case price target to $10 from $97, citing concerns over waning consumer demand in China. Jonas has cut his base-case price target four times this year, a far cry from his once bullish posture.

And on Monday, the Wedbush analyst Dan Ives, who has quickly gone from one of the most vocal Tesla bulls to neutral, cut his price target to $230 from $275.

Elon Musk's automaker disappointed investors last month when it reported a larger-than-expected quarterly loss. The company said it expected to return to profitability in the third quarter and reduce its losses in the second quarter, a reversal from Musk's prior guidance.

Tesla shares have fallen 39% this year. The stock is on track for its worst annual performance on record.

Now read more Tesla coverage from Markets Insider and Business Insider:

THE MODEL 3 THAT NEVER WAS: Leaked supplier documents show how Tesla's cheapest car is different than originally planned

Tesla closes at a 2 1/2-year low after analyst who cut his price target for the 4th time this year warns it's facing a 'code red situation'

Warnings about Tesla are growing louder as Morgan Stanley slashes its worst-case scenario to $10 a share

Markets Insider

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2019-05-23 14:48:45Z
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