Tesla (TSLA) holds despite 2 important price target cuts

Tesla (TSLA) is still in the green, albeit barely, today despite two Wall Street firms putting some pressure on the stock with important price target cuts following the disappointing Q1 delivery numbers.

The two price cuts are important because they are coming from longtime fans of Tesla’s stock.

Jefferies analyst Philippe Houchois reduced his price target on Tesla’s stock from $450 to $400 as he looks to the automaker’s Q2:

“While Q1 disappointed, the critical tests in our view remain demand elasticity in Q2 as lower priced M3 versions become available and sorting out logistics,”

$400 still represents significant upside to Tesla’s current stock price of $275 at the time of writing.

Houchois estimates a EBIT loss of $263 million for the first quarter and he revised his full-year revenue estimate down by 8% to $27 billion.

He still likes Tesla’s EV lead going forward by the describes the equity story as “stressful”:

“The Tesla equity story remains stressful but we continue to see value in Tesla leading the charge towards attractive and more affordable battery EVs when most competitors continue to enter at the high end where the EV/ICE trade-off is assumed to be highest,”

Houchois is ranked #1,167 out of 5,174 analysts on TipRanks with a success rate of 53% and an average return of 12.3%. He completely changed his view on the company over the last two years:

Morgan Stanley analyst Adam Jonas, who has been called Tesla’s biggest cheerleader in the past, also lowered his price target on Tesla.

He went from $260 to $240 a share today in a new note to clients:

“We are increasingly concerned about the impact that investor concerns over Tesla’s financial strength and forward looking liquidity position could potentially have on employee morale, customer perceptions and standing with key stakeholders and suppliers,”

Jonas now expects Tesla to deliver 344,000 vehicles in 2019, which is within the lower part of Tesla’s own guidance.

He was particularly surprised by Model S and Model X deliveries and he is adjusting his model accordingly.

Jonas is ranked #798 out of 5,174 analysts on TipRanks with a success rate of 49% and an average return of 8.1%. He has been a lot more cautious about his rating on Tesla over the last 2 years.