In October, Tesla (TSLA) said that it was "highly confident" sales would top 360,000 in 2019, and in July it gave a range for sales of between 360,000 to 400,000. To hit the low end of that range, Tesla would have to sell 105,000 vehicles in the fourth quarter.
But Cowen auto analyst Jeff Osborne said in a note Monday that Tesla will come in just short of that target. He forecasts deliveries of 101,000 cars in the last three months of 2019. Osborne attributes most of that dour forecast to softer-than-expected sales of Tesla's two luxury models: the Model S and Model X.
Osborne has been fairly bearish about Tesla's stock for some time, giving shares an "underperform" recommendation, which essentially means "sell." His note Monday actually raised both his fourth quarter delivery target from his previous estimate of 95,000 vehicles, and his price target to $210 from $190.
But Tesla's stock is trading at around $420 Monday. That means Osbourne expects the stock to fall 50% in 2020.
He believes the stock will take a hit if Tesla misses its sales target, as he predicts. And Osbourne said it will be difficult for Tesla to repeat the strong profits it reported in the third quarter.
"We continue to see risks to the company's growth story, which we believe is likely to be challenged as competition enters the market," he wrote Monday. "Simply, we see a lot more that can go wrong than can go right .... we don't see sustainable profitability in the near to mid-term."
The more bearish outlook, and the drop in the stock on Monday comes after a successful run of news for Tesla that has helped to lift the stock to an all-time high. Last week its stock reached the $420 mark, the price at which CEO Elon Musk had tweeted in August of 2018 that he would take the company private. Even with Monday's sell-off, shares of Tesla remain up 24% this year.
Tesla also announced Monday that it was completed the assembly of its first cars at its new plant in Shanghai and that it has delivered those cars to employees of the plant.
Tesla did not respond to a request for comment about the Cowen note.
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December 31, 2019 at 12:16AM
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Tesla's stock drops sharply after a weak sales forecast - CNN
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