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Tesla shares fall for a second straight session on Monday, RBC slashes price target on the stock, first-quarter Model 3 delivery forecast also cut

In a Monday note to clients, RBC Capital Markets stated that Tesla Incs first-quarter results, expected to be reported next month, would probably be affected by lackluster demand and overseas Model 3 delivery issues.

The brokerage firm has assigned an ”Underperform” rating on Tesla Inc (TSLA) and has revised down its 12-month price target on the stock from $245 to $210.

Tesla shares closed lower for a second consecutive trading session on NASDAQ on Monday. The stock went down 1.55% ($4.11) to $260.42, after touching an intraday low at $254.62, or a price level not seen since October 22nd ($252.59).

Shares of Tesla Inc have retreated 21.75% so far in 2019 compared with a 15.59% 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.

RBC Capital Markets now expects Tesla to deliver 52 500 Model 3 vehicles during its fiscal first quarter, down from 57 000 vehicles, as forecast earlier.

“We see both 2019 and 2020 revenue as down vs. the 4Q18 run-rate and, given Tesla is priced for growth, believe the valuation will come in,” RBC Capital analyst Joseph Spak wrote in the client note, cited by CNBC. “Overall, for 2019 we now forecast about 261,000 Model 3 [deliveries], down from 268,000 prior. Our 2020 forecast of 347,500 remains unchanged.”

“Our 2019 Model 3 average selling price is now $53,600, down from $55,500 prior – still stronger in the first half as Tesla fulfills higher-end demand internationally before lower priced models (which carry lower gross margin) kick in,” the analyst also noted.

He now expects the company to report an adjusted loss of $0.64 per share during the first quarter compared with a previous forecast of an adjusted profit of $0.68 per share.

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 29.60% upside compared to the closing price of $260.42 on March 25th.

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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