Tesla Inc. shares fell more than 4 percent on Monday after Goldman Sachs Group Inc. turned negative on the stock and cast doubt on CEO Musk’s ability to deliver the company’s new vehicle on time.
Analyst David Tamberrino downgraded the stock to sell from neutral and trimmed his six-month price target to $185 from $190. That helped send shares down 4.2 percent to close at $246.23.
"Ultimately we see a delayed launch," Tamberrino wrote in the report of the company’s anticipated Model 3 electric sedan -- which executives said last week is on schedule. He added that company is likely to need to raise capital before the end of the year in light of how fast it’s burning through cash.
This downgrade compounds record bearishness among Tesla analysts. The company’s shares lost 5.6 percent of their value last week as analysts questioned the quality of the firm’s fourth-quarter earnings report, which exceeded expectations. Cowen & Co. analyst Jeffrey Osborne dubbed the performance a "phantom beat."
Last week, Musk said the firm’s new vehicle is on schedule to arrive in July. Tesla has sometimes had difficulties meeting its production targets: "operational execution is still unproven," the Goldman analyst said.
Tamberrino expects that Tesla will be forced to issue $1.7 billion in shares in the third quarter to fund its capital-spending plans. An e-mail to Tesla requesting comment in pre-market hours wasn’t immediately returned.
"While we believe Tesla currently has a lead relative to OEM (original-equipment market) peers with respect to vehicle technology adoption, electric vehicle architecture, and (potentially) battery scale, our concerns are more near-term oriented with respect to operational execution on the Model 3 launch, an unproven solar business, and cash needs," he concluded.
Patrick Archambault, the previous analyst covering the company at Goldman, famously upgraded the stock to a buy the same day Tesla announced it would raise capital by issuing shares. Goldman was a lead manager of that deal.