Headquartered in Maranello, Italy, and founded in 1947, Ferrari N.V. (RACE), designs, engineers, pro...
What's the Downside for Tesla?
05/22/2019 5:00 am EST
Schaeffer's Investment Research is a leading provider of stock and options trading recommendations and market commentary. In its recent Midday Market Check, analyst Karee Venema looks at what she called a "shocking bear base" for Tesla Inc. (TSLA).
Morgan Stanley slashed its bear forecast on Tesla Inc. to $10 from $97, saying the downwardly revised worst-case scenario assumes a major miss for "Chinese volume forecast ... to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention."
However, analyst Adam Jonas maintained his $230 price target for Tesla — a nearly 12% premium to Monday night's close at $205.36.
Baird also chimed in on Tesla overnight, cutting its target price for the stock to $340 from $400, still in territory not charted since late January. In reaction, TSLA shares were initially trading below the $200 mark.
It's already been a rough stretch for the equity, which has closed lower in nine of the past 10 sessions — due in part to a series of fundamental follies, including CEO Elon Musk's cash flow warning and Autopilot issues — and bottomed at a two-year low of $195.25 yesterday. Year-to-date, TSLA is down 38.3%.
As such, the car stock is at risk of more price-target cuts. While, the majority of the 23 analysts covering TSLA maintain a "hold" or worse rating on the equity, the average 12-month price target sits all the way up at $277.75.
Options traders would certainly welcome more downside. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TSLA's 10-day put/call volume ratio of 1.21 ranks in the 84th annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip.
Related Articles on INDUSTRIALS
Corning (GLW) reported September quarter revenues of $2.97 billion, above the $2.89 billion consensu...
Defense stocks offer both downside protection and potential upside. In today’s environment, th...
Don’t look now, but while investors are all gaga about momentum stocks, the energy refiners ar...