Today, Wall Street analysts reduced price targets on electric automotive giant Tesla Motors Inc (NASDAQ:TSLA), Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA) and action camera giant GoPro Inc (NASDAQ:GPRO). Below are the changes along with current ratings and comments.
Tesla Motors Inc
Morgan Stanley analyst Adam Jonas reiterated an Overweight rating on shares of Tesla Motors, while reducing the price target to $333 (from $450), due to various challenges and delays.
Jonas explained, “Manufacturing and engineering challenges have delayed the launch by at least 1 year and may have added hundreds of millions of dollars to costs while potentially losing some customers. We anticipate a slower ramp to ensure top quality of the early vehicles. We note that our previous forecast already baked in Model X volumes well below Street expectations on significant manufacturing issues we highlighted around 18 months ago. Higher volumes in Model S serve as a partial offset.”
Furthermore, “It is reasonable to assume that Tesla’s technical resources have been diverted from other projects to ensure proper execution on X. This, added with the need to ensure the highest quality and most efficient manufacturing design on its lowest priced car, leads us to reiterate our expectation of a Model 3 launch in late 2018 (unchanged), at least 1 year later than the company is targeting. Low demand for electric vehicles categorically and globally in a $30 oil environment leads us to reduce volume assumptions for the Model 3, which we anticipate will achieve an ATP of $60k or more. Our revised 2020 forecast for complete vehicle deliveries is less than half of Tesla’s 500k unit target. We expect the Model 3 to be a really nice car, just a bit rarer than many expect.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Adam Jonas has a yearly average return of 11.4% and a 44% success rate. Jonas has a 24.5% average return when recommending TSLA, and is ranked #259 out of 3622 analysts.
Out of the 23 analysts polled by TipRanks, 10 rate Tesla stock a Buy, 7 rate the stock a Hold and 6 recommend a Sell. With a return potential of 49%, the stock’s consensus target price stands at $291.76.
Alibaba Group Holding Ltd
MKM analyst Rob Sanderson reiterated a Buy rating on shares of Alibaba, while lowering the price target from $105 to $95, to reflect heightened macro uncertainty and concern over GMV growth.
Sanderson noted, “BABA reported strong upside to revenue and EPS driven by mobile monetization gains, but GMV growth deceleration elevates the concern of a Chinese consumption slow-down. We believe the thesis is intact. We are disappointed that strength in key financial metrics was overshadowed by softness in an important, but non-financial metric. Our estimates are moving slightly higher, which we believe embed fairly conservative assumptions.”
According to TipRanks.com, analyst Rob Sanderson has a yearly average return of -7.5% and a 37% success rate. Sanderson has a -15.9% average return when recommending BABA, and is ranked #3346 out of 3622 analysts.
Most of the analysts covering Alibaba remain bullish on the company’s stock. A total of 31 analysts currently provide ratings; 29 of them suggest a Buy, while 2 recommend a Hold rating. The 12-month consensus mean price target for the stock is $95.07, reflecting a 44% upside from current levels.
In addition, Piper Jaffray analyst Erinn Murphy reiterated an Underweight rating on shares of GoPro, and reduced her price target to $7.50 (from $9.00), ahead of this week’s fourth-quarter earnings results.
Murphy commented, “While Q4 results were already pre-announced well below consensus, we are anticipating Q1 guidance on the call. Recall Q4 sales were revised to $435M versus guidance for $500M-$550M prior. We will be focusing our attention on direct vs. indirect dynamics, inventory position at year-end, new product launches and guidance. As it relates to our estimates, our Q1 sales estimate of $272M is below that of the Street at $298M. We are re-balancing our SGA assumptions and as such, we are lowering our Q1 EPS from $0.10 to breakeven and moving our FY16 from $0.60 to $0.50. In terms of product launches, we anticipate the company to launch Karma (quadcopter) in 1H and a new line of action cameras in 2H of CY16.”
According to TipRanks.com, analyst Erinn Murphy has a yearly average return of -11.3% and a 33% success rate. Murphy has a -16.5% average return when recommending GPRO, and is ranked #3549 out of 3622 analysts.