In the previous part of this series, we looked at how Tesla stock (TSLA) has underperformed most of the automakers in the last three months. The company’s biggest quarterly loss in 3Q17 and its struggle to resolve Model 3 production issues gave Tesla bears an opportunity to raise their voice. Let’s take a closer look.
JPMorgan Chase suggests short selling
According to a CNBC report, well-known JPMorgan Chase analyst Ryan Brinkman expects Tesla stock to fall ~40% to $185 from its market price of $305.20 as of December 4.
Brinkman expects Tesla to continue facing challenges in 2018 as competition in the electric vehicles segment increases from other mainstream automakers. He thinks that Tesla “is likely to raise more capital, diluting its stock.”
The research firm also highlighted that recent “tax law changes and exhaustion of the $7,500 US federal tax credit available to buyers” could make the work environment tougher for Tesla.
According to another CNBC report, popular Morgan Stanley analyst Adam Jonas said that Tesla stock could touch “highs in the range of $400 or more over the next few months.” He expects that Tesla will be able to resolve ongoing Model 3 production bottlenecks in near term, which should boost investors’ confidence.
However, Jonas also expects that Tesla stock could turn negative and witness sharp negative movement later in 2018 due to higher competition from other automakers.
Other automakers (XLY) including General Motors (GM), Ford (F), and Fiat Chrysler (FCAU) also increased the development of their electric vehicles. General Motors remains at the top of the list. It expects to add 20 new electric vehicles to its product portfolio by 2023.
In the next part, we’ll discuss the key factors that could impact Tesla’s valuation multiples in the next few months.