Tesla (TSLA) Stock Slides, RBC Capital Takes 'Prudent Approach' to Delivieries

Tesla (TSLA) stock is declining this afternoon as RBC Capital turns more cautious after Tesla reported lower-than-expected second-quarter deliveries.
By Rachel Graf ,

NEW YORK (TheStreet) -- Shares of Tesla Motors (TSLA) - Get Report are down 0.54% to $214.78 in early-afternoon trading on Friday after RBC Capital Markets cut its price target on the stock and lowered its earnings estimates to reflect disappointing second-quarter deliveries.

The firm dropped its price target by $10 to $210 after Tesla said it delivered just 14,370 vehicles in the second quarter, lower than its own estimate of 17,000 and the consensus of 17,220, Barron's reports.

RBC now projects that the electric vehicles manufacturer will lose 86 cents per share in the second quarter, compared to the firm's previous forecast for a loss of 31 cents per share. For the full year, RBC now anticipates a loss of 73 cents per share vs. its past estimate of earnings of 30 cents per share. 

"The market may not care on some of the short-term issues and the mid-to-long term opportunity remains unchanged," RBC said, according to Barron's. "However, there could be a tipping point where continued missed targets lowers confidence in the Model 3 ramp."

Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D+.

Tesla's weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

You can view the full analysis from the report here: TSLA

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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