Canaccord Cuts Tesla Price Target, Suggests New Company Leadership

Now that the deal to take Tesla, Inc. TSLA private is officially off the table, the focus for Tesla investors is back on the company’s Model 3 production, its goal of profitability in the third quarter and its precarious financial situation. One analyst says the “funding secured” drama is yet another sign Tesla might new leadership going forward.

The Analyst

Canaccord Genuity analyst Jed Dorsheimer reiterated his Hold rating for Tesla and lowered his price target from $336 to $316.

The Thesis

According to Dorsheimer, Tesla is at a major disadvantage to its larger competitors when it comes to resources.

“Our greatest concern is that while TSLA leads the market with brand and technology, a series of self-inflicted problems could open the door for new entrants with greater financial backing, such as the Toyota/Uber opportunity, for example,” Dorsheimer said on Tuesday.

Dorsheimer said the going-private confusion has been a distraction for Tesla at a critical time, and he has lowered his Q3 Model 3 production estimate by 7.6 percent from 52,000 to 48,000.

“We believe the drama associated with this endeavor, which includes tweeting ‘funding secured,’ is a great example of why even a great company may need different leaders during its life cycle,” Dorsheimer said.

Dorsheimer also lowered his full-year 2018 Tesla revenue estimate from $19.547 billion to $19.102 billion and his full-year EPS estimate from a $7.94 net loss to a $8.18 net loss.

Price Action

Tesla shares traded around $315 at time of publication. The stock is down about 9.6 percent in the past six months.

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