JP Morgan predicts Tesla shares will plunge more than 40% by year-end

Tesla’s stock fell 2.1 percent Friday. Its shares are up 3 percent so far this year through Thursday versus the S&P 500’s 5 percent gain.

Brinkman reaffirmed his $180 December 2018 price target for Tesla shares, representing 44 percent downside from Thursday’s close.

The analyst is cautious on the company’s second-quarter financial numbers. It is slated to report its June quarter earnings results on Aug. 1, according to its website. Tesla said on July 2 that it reached its one-week production goal of 5,000 Model 3 cars during the last week of the June quarter.

“We continue to be concerned that free cash flow has the potential to be a larger outflow, given the fact that the much heralded production rate improvement,” he said. “Additionally, we worry about margin, given the potential for overtime, premium freight, and other expenses employed to ramp production in a seemingly inefficient manner.”

Tesla did not immediately respond to a request for comment.

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