Tesla Inc (TSLA): Should Investors “Stay Away” for Now?

Three Wall Street experts shed cautious light on this electric car giant- is Tesla better for consumers than investors?


Is everything riding on 2018 for Tesla Inc (NASDAQ:TSLA)?

For a name that has a legendary reputation but a company that has yet to turn a profit, with some on the Street not expecting a profit to be realized in the next two years, to say the least, shares are under “tons of pressure.”

At the start of the week, partner and managing director of the Bapis Group at HighTower Advisors Michael Bapis spoke with CNBC’s “Trading Nation.” To put it bluntly, Bapis notes that with a “negative” analyst consensus and short interest rocket-high, “people have been hurt by that.”

Make no ifs, ands, or buts about it- consider this a “make-or-break year for the company,” wagers Bapis.

One bear continues to bet against this electric car giant: Goldman Sachs analyst David Tamberrino reiterated a Sell on Monday, skeptical that the company can meet its high goals for vehicle deliveries in the first quarter of the year. Tamberrino has a 6-month price target of $205 on TSLA, which implies a sharp close to 36% downside from current levels. (To watch Tamberrino’s track record, click here)

“We believe the company is tracking below its 2018 Model S/X guidance of approx. 100k units (an implied 25,000 per quarter),” Tamberino writes, adding: “Further, while monthly Model 3 deliveries are showing sequential improvement, we estimate that they will fall well short of consensus expectations.”

As far as Tesla’s balance, Tamberrino might as well be frowning, angling for EPS of ($9.23), which is even worse than FactSet analyst consensus expectations bracing for ($6.15).

“The fundamentals are breaking down,” warns the analyst, asserting: “We would stay away from the name. We think it’s priced more for the consumer than the investor and I would look out below.”

Oppenheimer analyst Ari Wald likewise spoke with “Trading Nation” at the start of the week- echoing negative sentiments that rocky waters lie ahead for the company: “The moderation in the trend is what’s most troubling for us.” Keep in mind, notes Wald, “You can see the stock’s 200-day moving average starting to roll over. That is indeed a cautionary signal.”

Yet, one point of optimism hangs in the mix, as Wald does acknowledge: “The silver lining is that from a 30,000-foot view, big picture, the stock is still above its major breakout above $290.” All the same, short-term, these Wall Street experts say it is a bad time to own TSLA shares: “I think ultimately longer term it could work again but for now this is a no-touch.”

TipRanks underscores caution as the dominant sentiment on Wall Street when it comes to CEO Elon Musk’s brainchild and its opportunities ahead. Out of 21 analysts polled in the last 3 months, 5 are bullish on TSLA stock, 8 remain sidelined, while 8 are bearish on the stock. Notably, the 12-month average price target stands at $322.31, aligning with where the stock is currently trading in the market.