Tesla Motors Inc
Tesla Motors Inc (NASDAQ:TSLA) shares dropped nearly 4% today after Goldman Sachs analyst David Tamberrino downgraded the electric car giant from Buy to Neutral, while lowering the price target to $185 (from $240), which implies a downside of 8% from current levels.
Tamberrino explained, “We see room for downward estimate revision as volume ramps slower and spending grows quicker. While our 2016E EPS is ahead of the Street (-$0.59 vs. Street at -$0.93), our 2017 through 2019 EPS estimates are an average 48% below consensus. This is the result of our expectation of a slower ramp to the Model 3 launch and incremental SG&A spend as the company continues its heavy investment period, as well as from increasing R&D associated with the Model 3 and new products.”
The analyst also has a reason to be concerned about the SolarCity merger, as he believes that the combination of two high growth, high cash burn businesses, creates a higher risk entity given the combined ongoing capital needs and higher net leverage that would potentially result.
“In the near-term we do see Tesla achieving a positive EPS result in 3Q16, mainly on strength of vehicle deliveries achieving half of the company’s 2H16 guidance. This puts our updated 3Q16 EPS estimate of $0.28 above consensus of $0.07. Additionally, we raise our estimates to fully incorporate the Tesla Energy business – driving a net positive increase to our 2016 through 2019 EPS estimates,” Tamberrino concludes.
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst David Tamberrino has a yearly average return of -45.0% and a 33% success rate. Tamberrino has a average return when recommending TSLA, and is ranked #3978 out of 4190 analysts.
Out of the 26 analysts polled by TipRanks, 9 rate Tesla stock a Buy, 10 rate the stock a Hold and 7 recommend a Sell. With a return potential of 27%, the stock’s consensus target price stands at $254.81.
Alnylam Pharmaceuticals, Inc.
Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) shares lost nearly half of their value today, after the drug maker announced that it will discontinue key asset Revusiran for the treatment of Familial Amyloid Cardiomyopathy (FAC).
In reaction, J.P. Morgan analyst Anupam Rama downgraded the stock from Buy to Neutral, while slashing the price target to $51 (from $83).
Rama commented, “Despite mixed phase 2 data, central to our Overweight ALNY thesis was the view that there was disconnect on the Street for Revusiran and we believed that the spectral nature of TTR amyloid disease (FAP / FAC), an anticipated natural history drop off in 6MWD over 18 months, and signals of stabilization in the phase 2 OLE study of patisiran in the cardiac sub-group of patients were all de-risking factors in the ongoing ENDEAVOUR study. That said, we acknowledge that this outcome was not factored into our model; frankly were not expecting mortality imbalances.”
“Looking forward, with Patisiran maxed out in our model ahead of phase 3 APOLLO data and upcoming data from the remaining pipeline likely being more incremental than gamechanging, we do not see significant value creation near-term,” the analyst concluded.
According to TipRanks.com, analyst Anupam Rama has a yearly average return of 6.9% and a 60% success rate. Rama has a 2.3% average return when recommending ALNY, and is ranked #855 out of 4190 analysts.