3 Big Risks In Goldman's Tesla Upgrade

Tesla Motors Inc TSLA shares have lost 20 percent since April 18. Goldman Sachs’ Patrick Archambault upgraded the rating for the company to Buy, with a price target of $250, saying that the pullback had resulted in 22 percent upside in shares over the next six months.

Apart from referring to the company's “disruptive potential," Archambault said the ramp of Model X, some other near-term catalysts and low expectations could lend upside.

The analyst enumerated three big risks to the upgrade:

1. Worsening overall investor sentiment, lessening the appetite for concept stocks.
2. Further delays in the production ramp of Model X, which could result in guidance being lowered as well as significant cash burn.
3. Operating expenses and/or capex investments surpassing the projections.