Tesla shares are facing a second straight week of losses
Tesla Inc. shares are nearing their second straight week of losses, down nearly 4% on the heels of a recent record close and a few negative analyst views.
Tesla TSLA, +0.33% stock ended at a record $385 on Sept. 18, and in the days since is down more than 14%. Shares have underperformed the broader market in recent months, although they are still outpacing the market so far this year.
There was “a lot of good news for Tesla” in past months, including meeting important deadlines with the Model 3, but the shares have been overvalued for a while, said Efraim Levy, an analyst with CFRA, who has a sell rating on the stock.
In recent weeks, negative news flow included Elon Musk’s announcement that the Tesla semi truck would be unveiled in October, rather than September, and a few negative analyst opinions, he said.
Earlier this week analysts at Bernstein took a deep dive into Tesla’s cash burn, keeping their neutral rating on the stock but concluding that a botched Model 3 ramp-up could spark a selloff in the stock.
Tesla unveiled the Model 3, its first mass-market offering, in July as expected and has promised a production ramp-up starting in the fourth quarter.
Last week, a day after the shares’s record close, analysts at Jefferies started their coverage of Tesla stock, forecasting that Tesla will lose money at least through 2019, which is a year longer than most other analysts are expecting. The Jefferies analysts called the consensus “too optimistic.”
The two cautious views on Tesla were tempered by a more optimistic note earlier this week from analysts at Morgan Stanley, who predicted millions of Teslas on the road in the next few years, giving the company a leg-up on data gathering and machine-learning training.
Tesla shares have lost 9% in the past three months, versus gains of 2.8% for the S&P 500 index SPX, +0.12% and 4.4% for the Dow Jones Industrial Average DJIA, +0.18% Quarterly losses have mounted to more than 6%, contrasting with a 3.6% rise for the benchmark. So far this year, however, the stock is up 58%, about five times the 2017 gains for the S&P.