Tesla stock (NASDAQ: TSLA) has made investors tons of cash. The stock has risen so far, so fast, that even CEO Elon Musk has said the stock is way overpriced. Well now we may finally see a real pullback after Jeffries’ initiated coverage this morning. Philppe Hucois is lead analyst and he thinks that Tesla won’t make a dime until next decade.
The analyst set a 12-month price target for Tesla shares at $280, representing 27 percent downside from Monday’s close.
Houchois predicts Tesla will continue to lose money on an annual basis through 2019. He has:
“doubts about Tesla’s ability to generate 30+% gross [profit] margin required to support its vertically integrated business model in distribution/supercharging.”
The electric car maker’s shares are outperforming the market this year, up 80 percent year to date through Monday compared with the S&P 500’s 12 percent return.
“Given capital intensity, we don’t think DCF [discounted cash flow] can justify the current valuation, let alone upside. We appreciate the growth upside from a brand whose reach goes well beyond auto markets and that valuing Tesla today assumes some form of ‘steady-state’ that is unlikely to happen anytime soon.”
10 other analysts rate the name a hold, 7 a sell, and 9 a buy. That tells you it’s all guesswork. Stay away.