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Tesla (TSLA) stock tumbles as Wall Street starts piling up the negativity

Right after helping Tesla (TSLA) raise over $2 billion, Wall Street is turning on the automaker with a series of negative analyst notes predicting a lot of downside for Tesla investors.

Yesterday, Morgan Stanley analyst Adam Jonas, who was once called Tesla’s biggest cheerleader, was out with a new note for clients.

In the note, the analyst actually kept his main price target for the stock at $230 and even noted that he sees a bull-case valuing Tesla at $391, but the media focused on his “bear case”, which included a $10 a share valuation.

He wrote:

“Demand is at the heart of the problem. Tesla has grown too big relative to near-term demand, putting great strain on the fundamentals.”

The note put pressure on Tesla’s stock yesterday, but it erased most of its losses by the end of the day.

Adam Jonas is ranked #704 out of 5,185 Analysts on TipRanks with a 49% success rate and an average return of 8.3%. After a long history of recommending Tesla’s stock, he has had a neutral rating on it for a while now:

Today, it’s Citigroup’s turn to issue a negative note on Tesla’s stock (TSLA).

Citi analyst Itay Michaeli wrote to clients today:

“Maintain sell/high risk as the risk/reward still appears negatively skewed despite the recent capital raise and stock pullback, mainly on lingering demand/FCF (free cash flow) concerns. Reducing estimates to reflect the recent capital raise, Q1 results/guide and our own inputs.”

The analyst is cutting his main price target on Tesla to $191 (down from $238) following the adjustment of three scenarios: a 40% chance (up from 35%) of a “full bear” scenario at $36 a share, a 55% chance of a “moderate bull” scenario of $253 and a 5% chance (down from 10%) of a “full bull case” at $760 a share.

Itay Michaeli is ranked #1,086 out of 5,185 Analysts on TipRanks with a 55% success rate and an average return of 6.7%. He has been recommending to sell Tesla’s stock (TSLA):

Tesla’s stock was down more than 3% to $198 per share following the Citigroup note.

Electrek’s Take

It always surprises me that these guys have such a big impact on markets and stocks like Tesla’s considering they have been consistently wrong.

I mean Jonas predicted that Tesla would be so late that the Model 3 that it would only arrive in “2018” and volume deliveries wouldn’t start until 2019.

Tesla ended up delivering almost 150,000 Model 3 units in 2018.

It’s just one of many examples of those supposedly top Wall Street analysts getting things wrong when it comes to Tesla.

I wouldn’t base any investment decision on what they are saying, but it looks like many are since they are moving the market.

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