Tesla Stock Slide May Halt With Model 3 Unveil, Barclays Says

  • New model's March showing seen drawing attention to company
  • Electric-car maker's stock fell 38% this year through Monday

Why This Could Be a Tough Quarter for Tesla

Tesla Motors Inc. could re-ignite investor interest next month if the company shows off its mass-market Model 3 car as expected, a Barclays Plc analyst said.

Investors and analysts are expecting Tesla to provide more details about the Model 3 when the electric-car maker reports fourth-quarter earnings Wednesday. Brian Johnson, the Barclays analyst, said in a research note Tuesday that he expects Tesla to reiterate that production of the car will start in late 2017 and show a concept car in March that proves the company is progressing with development of its lower-priced model.

New details about the Model 3 might generate enough hype on social media to get investors interested in the stock again, Johnson said. If Tesla Chief Executive Officer Elon Musk shows a concept car, that may spark a rebound in a stock that was off 38 percent this year through Monday.

The unveiling is likely to be in late March “and there won’t be a lot of details revealed, but we do expect a concept car, not just photos or drawings,” Johnson said in the note. “We expect interest in Tesla to be reinvigorated amidst a wave of social media attention.”

The automaker confirmed that the Model 3 will be priced at $35,000 before state and federal tax incentives, meaning the car could cost $25,000.

Tesla gained 0.7 percent to $149.09 at 2:17 p.m. in New York after rising as much as 8 percent, the most intraday since Nov. 4. The shares on Monday reached a a two-year low.

Investors have been bearish about the stock because of concern about whether the company can efficiently produce enough of its new Model X sport utility vehicle. Musk is expected to give an update on how many cars Tesla expects to deliver in 2016 during Wednesday’s earnings report.

Before it's here, it's on the Bloomberg Terminal.