Tesla Falls Again as Barclays Joins Peers, Cuts Target Price

  • Analyst says SUV output rate raises questions about Model 3
  • Stationary-battery business seen facing intense competition

Tesla Motors Inc. fell Friday to the lowest price in six weeks after Barclays downgraded the stock to the equivalent of a sell rating. Tesla shares declined every day this week.

Tesla dropped 2.7 percent Friday at $220.69, the lowest closing price since Aug. 25. The stock has fallen for five straight days -- its longest losing streak this year -- slumping 11 percent and wiping out $3.5 billion of market valuation.

Bearish sentiment has been growing since Tesla delivered the first six of its Model X SUVs at an event in Fremont on Sept. 29. Morgan Stanley analyst Adam Jonas in an Oct. 6 note lowered his price target, and Ben Kallo of Robert W. Baird downgraded Tesla to neutral Oct. 7. Brian Johnson, an analyst with Barclays, trimmed his 12-month target price for Tesla today to $180 from $190 and rated the shares underweight, noting that last week’s X launch “failed to boost the shares.”

Tesla shares fell 8.4 percent this week through Thursday.

Data compiled by Bloomberg

Barclays was already predicting that Tesla would come up short of its 2015 target for at least 50,000 deliveries, and the prospect of a slow increase in production of the Model X sport utility vehicle raises questions about whether the more affordable Model 3, due in 2017, might be delayed.

“Our fundamental difference with the Tesla bulls lies around the company’s ability to become a successful mass-market” automaker, Johnson wrote in a note to clients. “While the bulls believe Tesla will be the next Ford, we see many challenges ahead for Tesla and argue that ‘crossing the chasm’ is harder than it looks.”

Johnson also said that intense competition may limit the potential for Tesla Energy, the stationary electricity-storage business.

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