Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Tesla shares seen slumping 30% in next six months due to increased competition, says Goldman Sachs

Goldman Sachs predicted Tesla's shares would fall to US$210 from levels over US$300
A Tesla car.
Tesla is an electric car maker.

Shares of Tesla Inc (NASDAQ:TSLA) could stumble by 30% in the next six months because of increased competition from other luxury carmakers, a report by Goldman Sachs (NYSE:GS) quoted by CNBC said. 

The network reported that Goldman analyst David Tamberrino has recommended a sell rating for Tesla stock because competition will cut into the company's share of the electric car market. Goldman had resumed coverage of Tesla after it dropped commenting on the stock when it was hired by Tesla chief executive Elon Musk on his go-private plans.

READ: Tesla stock falls after Musk drops go-private plan, but Baird analyst says it is ‘positive for all stakeholders’

"We see the medium-to-longer term industry backdrop as challenging for Tesla's products," Tamberrino was quoted in a note to clients by CNBC. "We believe the company will see pressure to its lead in EVs (electric vehicles) as competition catches up."

Tamberrino gave a US$210 six-month price target for Tesla's shares. The shares were trading down 2.1% at US$295.35 in the premarket on Tuesday. It was trading 1.8% lower at US$296.12 in early dealings. The stock closed on Friday at US$301.66, off 0.5% for the session. US financial markets were closed on Monday for a holiday.

READ: Is Tesla's dominance in luxury market under pressure as Mercedes to unveil new model?

The Goldman analyst said several large automakers such as Audi, BMW, Jaguar and Porshce are expected to launch their own electric vehicles in the coming years.

"With regional mandates and tightening CO2 standards, both traditional and new entrants are expected to launch several EVs in the coming years — with a large crescendo in the early-to-mid 2020s," Tamberrino said. "Altogether, we remain bearish on the company's ability to execute, achieve its targeted production ramp/margins, and sustain FCF [free cash flow] generation."

Musk sparked frenzied speculation in the markets when he announced his plan to take Tesla private early last month. He has abandoned that plan.

 

 

 

 

View full TSLA profile View Profile

Tesla Inc Timeline

Related Articles

tubes
Wed
The company is a leading global producer of Halloysite clay and owns the only deposit in the western hemisphere big enough for large-scale commercial production
1508431368_iplayco-wall.jpg
November 19 2017
When finalised, Iplayco will own the IP rights to the Play Mart and Play Planet brands, as well as the Play Planet line of business. .

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use