Harriet Lefton

About the Author Harriet Lefton

Harriet originates from the UK where she worked as a journalist specializing in the metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer.

Barclays Lays Out the Bearish Case on Tesla Motors Inc (TSLA); Predicts Zero Model 3 Deliveries for 2017

Barclays analyst Brian Johnson continues to sound the alarm on automaker Tesla Motors Inc (NASDAQ: TSLA), anticipating a high probability that a delay is forthcoming on the all-electric Model 3 vehicle. How bad will this bode for TSLA? The analyst is looking for zero Model 3 deliveries for 2017.

In fact, Johnson goes as far as to spell out CEO Elon Musk’s future announcement on Twitter Inc (NYSE:TWTR), predicting Musk will tweet, “Great progress so far on Model 3, but still have a number of tweaks ahead – thus will take a little longer than expected.”

Additionally, the analyst expects a $1.5 billion equity raise to hit in the first quarter of 2017, with an accompanying tweet from Musk likely chiming in, “Time to derisk with a capital raise.”

Johnson’s bearish outlook extends to Tesla’s recent $2 billion acquisition of solar panel installer SolarCity Corp (NASDAQ: SCTY) on back of over 85% shareholder approval for the merger. “We expect Tesla to significantly reduce SolarCity growth until reg. and econ. conditions are more favorable…” Johnson notes, adding he imagines Musk will comment, “Slowing the growth at SolarCity until regs more favorable.”

With his last swipe at the automobile maker, Johnson remarks, “With Elon now part of President-elect Trump’s Strategic & Policy Forum, wouldn’t it make sense for him to leverage Tesla’s position as the only automaker with effectively all of its manufacturing in the U.S.?” The analyst cheekily offers a final wisecrack regarding Musk’s prospective thoughts on the matter, imagining the CEO will assert, “We don’t need EV subsidies, but we should get some $ for all the U.S. employment we create.”

Perhaps not surprisingly, Johnson has reiterated his Sell rating on shares of TSLA- his 10th consecutive sell rating on Tesla since November 2015. The analyst does not suggest a price target.

Production glitches saw the automaker recently announce disappointing Q4 numbers of 22,200 vehicle deliveries. Tesla subsequently missed its end-of-year target of 80,000 by roughly 3,000 deliveries.

Brian Johnson is a four-star analyst according to financial accountability engine TipRanks. TipRanks reveals that the analyst has a success rate of 56% and an average return of 3.3%.

The analyst consensus rating for Tesla on TipRanks is Hold based on 14 analyst recommendations made in the last 3 months, with 4 rating a Buy on Tesla stock, 7 maintaining a Hold, and 3 issuing a Sell. The 12-month average price target is $211.7,5 which translates to a 6.71% downside from the current share price.

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