Analysts Remain Uncertain on Tesla Stock amid Production Woes


Oct. 13 2017, Updated 5:35 p.m. ET

Analysts’ ratings on Tesla stock

According to the data compiled by Reuters as of October 11, about 35% of the 23 analysts covering Tesla (TSLA) gave its stock a “buy” recommendation. Another 35% recommended a “hold,” while the remaining 30% of analysts covering the company gave a “sell” recommendation.

Three months ago, only about 29% of the analysts covering Tesla stock gave it a “buy” recommendation.

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Price target and upside potential

On October 11, 2017, Tesla’s 12-month consensus target price was $321.89, which was already about 9.2% lower from its market price of $354.6. In the previous month, analysts’ consensus price target for the company’s stock was $317.29.

In 3Q17, Tesla stock yielded a return of about -5.7%. Despite these quarterly losses, its stock price has risen about 65.9% on a YTD (year-to-date) basis as compared to a 14.1% rise in the S&P 500 Index (SPY). With consistent strength in 2017, Tesla became the most valuable US auto company by market cap in April 2017. However, TSLA lost that position to General Motors (GM) again due to recent weakness in its stock.

As of October 11, TSLA had a market cap of $59.2 billion, which was lower than GM’s $66.3 billion but much higher than the market caps (XLY) of Ford (F) and legacy motorcycle pioneer Harley-Davidson (HOG).

Model 3 production bottlenecks

In 3Q17, Tesla delivered only 220 Model 3 units and produced 260 units. These production and delivery figures were much lower than expectations. The company attributed lower production to the production bottlenecks it faced. In a press release, Tesla reported that “there are no fundamental issues with the Model 3 production or supply chain” and showed confidence to be able to fix these bottlenecks soon. These Model 3 production woes could be the primary reasons why analysts remain uncertain about Tesla stock in October.

To learn more about what to expect from Tesla’s Model 3 production in 4Q17, read Can Tesla Fix Model 3 Production Bottlenecks in Time?

Read on to the next part to learn how analysts are rating General Motors stock in October 2017.


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