Tesla shares fall the most in a week on Friday, Cowen revises down price target on the stock, says low-cost Model 3 required before demand strengthens

In a Friday note to clients, Cowen analyst Jeffrey Osborne said that he expected soft US demand for Tesla Inc’s Model 3 sedan until the electric car maker releases the lower-priced $35 000 model during the upcoming quarter.

The firm has assigned an ”Underperform” rating on Tesla Inc (TSLA) and has slashed its price target on the stock from $200 to $180.

Tesla shares closed lower for the fifth time in the past twelve trading sessions on NASDAQ on Friday. It has also been the steepest daily loss since March 15th. The stock went down 3.46% ($9.49) to $264.53, after touching an intraday low at $264.00, or a price level not seen since March 19th ($263.46).

Shares of Tesla Inc have retreated 20.51% so far in 2019 compared with a 15.74% gain for the benchmark index, Nasdaq 100 (NDX).

In 2018, Tesla’s stock went up 6.89%, thus, it outperformed the Nasdaq 100, which registered a 1.04% loss.

Cowen now expects Tesla to deliver 47 500 Model 3 vehicles in its fiscal first quarter, down from 55 000 vehicles, as forecast earlier, while delivery estimates for Tesla’s Model S/X were cut to 18 000 vehicles from 21 500 previously.

According to Osborne, China may pose the greatest risk to the revised estimates, because of less transparent delivery expectations and customs clearance in the Asian country.

“We have also updated our model to reflect the company’s price changes throughout the lineup and the likely negative impact to margins,” Cowens Osborne wrote in a client note, cited by Bloomberg.

According to Osbornes estimates, production could exceed deliveries by 10 000 to 15 000 vehicles, which will result in “a drain on cash in first quarter.”

According to CNN Money, the 28 analysts, offering 12-month forecasts regarding Tesla Inc’s stock price, have a median target of $337.50, with a high estimate of $530.00 and a low estimate of $180.00. The median estimate represents a 27.58% upside compared to the closing price of $264.53 on March 22nd.

The same media also reported that 11 out of 30 surveyed investment analysts had rated Tesla Inc’s stock as “Buy”, while 7 – as “Hold”. On the other hand, 8 analysts had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Tesla Inc (TSLA) are presented as follows:

Central Pivot Point – $268.68
R1 – $273.90
R2 – $283.27
R3 – $288.49
R4 – $293.71

S1 – $259.31
S2 – $254.09
S3 – $244.72
S4 – $235.35

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