What Wall Street Is Saying About Tesla

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Let’s talk about Tesla, which was tanking in trading Wednesday.

At one point, the stock was down as low as 20%.

This is the largest decline on record for the stock.

This comes after two days of trading where the stock was up double digits. At one points, shares were trading over $960.

And now the shares are down around $720 a share.

However, the stock is still up over 120% in the past year.

Part of the stock sinking like a rock could be attributed to the delay of the Model 3 deliveries in China due to the coronavirus.

The company confirmed that expected deliveries of the Model 3 sedans will be delayed as Tesla’s Shanghai factory remains shuttered because of the virus.

Jim Cramer wrote on Tesla over on RealMoney.com. He said that he “profoundly disagrees about Tesla’s stock being done.”

He notes that we found natural sellers in Tesla. “Today's just an extension of what happened after the sellers let some air out of the balloon,” he said.

Let’s take a look at what some analysts are saying around Wall Street.


Barclays released a note titled “Party Like It’s 1999”

The note starts by saying, and I quote, Not to sound like an OK, Boomer to the younger investors rushing into TSLA shares, but the recent price action brings to mind Nasdaq circa 1999.”

Barclays left its rating unchanged at underweight, and raised the price target to $300 from $200.

Barclays noted that it sticks with its forecast of 100,000 deliveries in the first quarter of 2020 based on Tesla’s guide for some seasonality and--here's the kicker--a minor impact of the coronavirus.

Morgan Stanley

Morgan Stanley’s note was based on Tesla’s coming within 3% of $1,000 a share. Analysts said, “investor feedback from our discussion has been calm, curious and overall cautious. Folks are asking a lot of questions.”

Morgan Stanley has had a $650 bull case and has the stock rated as Underweight.

When looking at the volatility in the stock, Morgan Stanley analyst Adam Jonas noted, “The stock has appreciated more than 60% in the past 6 trading days. While fourth quarter results were somewhat stronger than expected, the company’s 2020 outlook for both volume and gross margin was not materially higher than consensus expectations. As such, many investors are struggling to identify a strong fundamental underpinning for the move.”


Canaccord downgraded Tesla to hold, with an unchanged price target of $750.

Analysts noted the “balanced risk reward for investors to lock in profits.”

And said “we see the risk of China's coronavirus as a clear headwind to the Shanghai facility, suggesting a more pragmatic position.”

Canaccord says that the shutdown has them believing that a “reset in expectations is likely” and needs to be reflected in their valuation.

Analysts did note, however, that the April battery day will be a “critical positive milestone” for investors to understand the lead that Tesla has as an “electric vehicle juggernaut” and they think that patient investors may get a more attractive entry point. 

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