This Analyst Sounds the Alarm on Tesla (TSLA) Stock


On the heels of Musk’s controversial tweet in which he suggested he was in the process of taking Tesla (NASDAQ:TSLA) private, a move that subsequently spurred an SEC probe over whether he was misleading investors, Consumer Edge Research’s James Albertine downgraded TSLA shares from Overweight to Equalweight, while slashing the price target to $311 (from $385). (To watch Albertine’s track record, click here)

Albertine commented, “It is difficult to assess and probability weight outcomes related to (a) ongoing SEC inquiries and potential penalties assessed and/or fines imposed, and (b) CEO Elon Musk’s ability to continue serving in such a broad capacity, both of which we believe are integral to near-term stock price actions. We believe TSLA has entered a period in need of deeper “corporate restructuring” that likely leaves shares range-bound near-term, regardless of fundamentals. We see Elon as a generational visionary who has broken new ground by disrupting the 100-plus year-old auto industry, and that is still the case. But it is becoming more clear that he may be stretched too thin and could benefit from a CEO and/or COO hire. Though we believe TSLA is taking advantage of an automotive manufacturing model that is antiquated and controlled by incumbents that are slow to react to restructuring needs, Elon’s inability to maintain his composure as demonstrated on the 1Q18 conference call and in various occasions in the past several months vis-à-vis Twitter (especially with respect to non-business related matters) has gone too far and warrants an intervention by the Board, key investors and colleagues alike.”

Overall, Wall Street is torn when it comes to whether to sing this electric car giant’s praises or assess with an apprehensive gaze, as according to TipRanks, out of 24 analysts polled in the last 3 months, 8 are bullish on Tesla stock, 8 remain sidelined, while 8 are bearish on the stock. With a slight upside potential of nearly 4%, the stock’s consensus target price stands at $333.52.

 

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