Tesla Motors Inc. shares fell 14 percent, the most in more than 18 months, after Goldman Sachs Group Inc. set a target price more than 30 percent lower than the electric-car maker’s close yesterday.
Tesla plunged to $109.05 at the close in New York, the biggest one-day decline since Jan. 13, 2012. Shares of the Palo Alto, California-based company have more than tripled this year, compared with an 18 percent increase in the Russell 1000 Index.
Patrick Archambault, a Goldman Sachs auto analyst, set a Tesla target price of $84, the average of three scenarios. That compares with Tesla’s close of $127.26 yesterday and its record $129.90 close on July 12. The report’s best-case scenario was a target price of $113. Goldman Sachs cited “sustainability of demand longer term” as among the risks for Tesla.
Tesla shares have surged as the popularity of its $69,900 Model S sedan helped generate a first-quarter profit, the company’s first. The automaker is ramping up production of the car and is preparing to introduce a sport-utility vehicle next year.
Goldman Sachs also downgraded the auto industry to neutral.
“Auto stocks typically lag when rates rise,” Archambault wrote. “This has occurred even in the face of rising demand.”
U.S. Federal Reserve Chairman Ben Bernanke said last month the central bank will begin easing the pace of its current bond-buying purchases, leading to rising interest rates, once unemployment improves. The announcement didn’t immediately hurt the auto industry, which posted its fastest sales pace in June in more than five years.
Separately, Tesla said it will report second-quarter financial results on Aug. 7.