dreamingof3
Member
It's official- we are in analyst pile on mode. Berenburg starts coverage on Tesla as "sell". Price target is 165. Where were these guys at 242 in December? Why does Tesla appear to be the most hated stock on the street?
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I not sure you have been following this and now EM has a tweet out about it.....My concern is not necessarily the 'complainer' but some of long term members of TMC and TM supporter's comments: EX: Dave T : http://www.teslamotorsclub.com/showthread.php/61836-Banned-by-Tesla?p=1352620&viewfull=1#post1352620
The company is not failing but in some ways it has lost its way. Exponential growth comes at a price.
Maybe AmpRealtor is correct. Maybe EM is spread too thin.
The company is not failing but in some ways it has lost its way. Exponential growth comes at a price.
Maybe AmpRealtor is correct. Maybe EM is spread too thin.
Relax man. The headlines are literally running out of things to print. They initiated coverage and truthfully speaking sell side equity analyst (bulge brackets and these mid level/small players) weight don't mean much and don't move things.
dreamingof3
Member
dreamingof3
Member
Shorts are not covering or we would have some price stability. I'm losing money so fast I could vomit.
Gerasimental
Member
I think this price action is no longer to do with execution risk.
Even with oil up, today was another deep red macro day globally. Every day like today makes the scenario of a prolonged slump in equities seem more likely, and the longer it goes on the less relevant oil is to the story.
In this scenario, Tesla is faced with the decision of slowing down growth dramatically, or having to raise cash at depressed prices and cause huge dilution. The implication of that decision on TSLA is what we are seeing here. Either the growth on which the price of this stock depends is forced to slow, or it continues but the stock gets heavily diluted. They both have the same effect on stock price.
Even with oil up, today was another deep red macro day globally. Every day like today makes the scenario of a prolonged slump in equities seem more likely, and the longer it goes on the less relevant oil is to the story.
In this scenario, Tesla is faced with the decision of slowing down growth dramatically, or having to raise cash at depressed prices and cause huge dilution. The implication of that decision on TSLA is what we are seeing here. Either the growth on which the price of this stock depends is forced to slow, or it continues but the stock gets heavily diluted. They both have the same effect on stock price.
JRP3
Hyperactive Member
Moved some money into my account, picked up some shares at $174.50, keeping some cash in case things get really crazy, or crazier. Completely unwarranted selloff in my opinion.
chances are trading bots/algo got word of Sell and 165 PT and decided to do just that.
those Analyst work very organized and coordinated i must say.
Tomorrow Comes Boa and another downgrade maybe
)The antidote to falling prices is an accelerating model X ramp . Just my view.
Today's drop is based on a "Street Insider" news story about what I suspect is not a completely legitimate analyst at all "initiating coverage." It's easy money in a quiet news cycle to call in a favor and ask a relatively unknown bank to publish a negative report on an equity they have never covered before.
I don't see us staying this low going into ER.
I don't see us staying this low going into ER.
This is the Street Insider "article" Fluxcap was referring to:
Berenberg initiated coverage on Tesla Motors (NASDAQ: TSLA) with a Sell rating and a price target of $165. Analyst Adam Hull expressed concerns about margins, as well as valuation and competition, and he sees better value in Daimler and VW.
Excluding government incentives, Tesla’s true core gross margin in the luxury large car segment is not c24%, but under 20% whereas Mercedes and BMW achieve 35-40%, said the analyst.
"From a start-up in 2003-04, Tesla’s achievement is impressive. However, despite the negative effect of the strong dollar and the low oil price, its 2017E enterprise value of c$27bn is more than double what we estimate Mercedes is valued at," said Hull. "While the Model 3 range, presented in late March 2016 and to be delivered from Q4 2017, should be a strong product, we think margins will disappoint. We are 10-18% below 2016-18 EPS consensus, but with 2020 EPS of €9.0 we are c37% below 2020 EPS consensus of c$14.3."
The analyst continued,"At this price, we think Tesla is now a play on Model 3’s potential profits – we forecast a gross margin of 16% in 2020, well below the c20% consensus. We even assume a halving of the current non-battery Model S COGs of c$58,000. Mercedes and BMW have c$70bn of revenue in the segment yet only achieve a gross margin of c15% and an EBIT margin of c4%. Even in 2020, Tesla’s Model 3 revenue may only be c$10bn. We also think many competitors will accept large losses on EVs until 2025.
Hull added, "Falling battery costs and greater cost efficiencies support margins, but do not offset three large margin headwinds: 1) a strong US dollar, which has a direct negative effect of c500bp versus FY 2014 average, in addition to the risk that German and Japanese OEMs cut US and Chinese prices; 2) the ending of Tesla’s US federal incentive of $7,500/car before 2019, whereas competitor cars will still get it (giving them nearly a 20% price advantage over the Model 3); 3) low oil price reducing the take up of EVs."
Berenberg initiated coverage on Tesla Motors (NASDAQ: TSLA) with a Sell rating and a price target of $165. Analyst Adam Hull expressed concerns about margins, as well as valuation and competition, and he sees better value in Daimler and VW.
Excluding government incentives, Tesla’s true core gross margin in the luxury large car segment is not c24%, but under 20% whereas Mercedes and BMW achieve 35-40%, said the analyst.
"From a start-up in 2003-04, Tesla’s achievement is impressive. However, despite the negative effect of the strong dollar and the low oil price, its 2017E enterprise value of c$27bn is more than double what we estimate Mercedes is valued at," said Hull. "While the Model 3 range, presented in late March 2016 and to be delivered from Q4 2017, should be a strong product, we think margins will disappoint. We are 10-18% below 2016-18 EPS consensus, but with 2020 EPS of €9.0 we are c37% below 2020 EPS consensus of c$14.3."
The analyst continued,"At this price, we think Tesla is now a play on Model 3’s potential profits – we forecast a gross margin of 16% in 2020, well below the c20% consensus. We even assume a halving of the current non-battery Model S COGs of c$58,000. Mercedes and BMW have c$70bn of revenue in the segment yet only achieve a gross margin of c15% and an EBIT margin of c4%. Even in 2020, Tesla’s Model 3 revenue may only be c$10bn. We also think many competitors will accept large losses on EVs until 2025.
Hull added, "Falling battery costs and greater cost efficiencies support margins, but do not offset three large margin headwinds: 1) a strong US dollar, which has a direct negative effect of c500bp versus FY 2014 average, in addition to the risk that German and Japanese OEMs cut US and Chinese prices; 2) the ending of Tesla’s US federal incentive of $7,500/car before 2019, whereas competitor cars will still get it (giving them nearly a 20% price advantage over the Model 3); 3) low oil price reducing the take up of EVs."
MartinAustin
Active Member
I just backed up the truck and bought a bunch at $173 !!! Never thought I'd see this opportunity.
I laughed so hard when he talked about the federal incentive of $7,500 ending being a factor while competitors will still receive this. Hence the point about Model 3 starting at 35K before federal incentive. Even so, there are suppossed to be so many "Tesla killers." News flash to this guy, most competitors will not accept large losses on EV's for that long, if they want to make it serious they'd invest in EV's while decreasing the gas business-- competitors also have shareholders to be accountable to.
I also love how he left out Tesla Energy entirely.
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