Tesla's Back In Favor, But Goldman Sachs Is Still Selling

Tesla Inc TSLA has rebounded nearly 20 percent since reporting first-quarter production figures last week. One analyst won’t back the rally.

The Rating

Goldman Sachs analyst David Tamberrino maintained a Sell rating on Tesla and lowered the price target from $205 to $195.

The Thesis

Tamberrino attributes the recovery to Tesla’s reiterated production rate target of 5,000 Model 3s per week and its announced ability to achieve its goals without a 2018 debt or equity raise. By his assessment, neither strategy will hold.

The analyst expects Tesla to achieve a second-quarter sustainable production rate below Q1's 2,000-vehicle end rate. Amid February’s Fremont line improvements, 1,400 is more likely, Tamberrino said. 

“While this is an improvement from our previous forecast (adjusted accordingly), it is below revised consensus forecasts as well as below bullish investors’ expectations, in our view," the analyst said in a Tuesday note. 

Between Model 3 cash burn and growth targets, Tamberrino said he expects Tesla to raise capital at some point this year.

Model S and X demand could be stunted by rising competition and the loss of the electric vehicle tax credit in the back half of the year, he said. 

Price Action

At the time of publication, Tesla shares were trading up 4.53 percent at $302.77.

Related Links:

Bernstein: 'Uncertainties Loom Ahead' For Tesla Following Q1 Delivery Report

A Model 3 Miss, Capital Questions And Factory Shutdowns: What Wall Street Says About Tesla's Q1 Deliveries

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