Shares of electric carmaker Tesla Motors Inc (TSLA) are down $3.60, or 1.57%, at $225.76, after Piper Jaffray’s Alexander Potter initiated coverage on the stock with a ‘Neutral’ rating and a $223 price target, writing that “[l]ike everyone, we’re captivated” by Tesla, but “we’d rather not own” the stock ahead of likely Model 3 delivery delays. TSLA shares closed yesterday down $6.16 to $229.36, extending their year-over-year loss to nearly 8 percent.
In his research note, Potter notes that within the Autos, Trucks, and Advanced Mobility space, Mobileye N.V. (MBLY) is his favorite growth stock. Further, the analyst contends that while lots of companies are making cars safer, greener, and more connected it’s hard to find “time-tested suppliers” like Mobileye when it comes to safety through vehicle automation. Potter initiated MBLY with an ‘Overweight’ rating and $50 price target, which represents an expected 34% upside to the stock’s Thursday closing price of $37.38.
In other Tesla news this morning, the company has strongly denied claims that there were safety defects in the suspension of its Model S and Model X cars, and that the U.S. National Highway Traffic Safety Administration [NHTSA] had opened an investigation or a “preliminary evaluation” on the matter. Furthermore, Tesla called ‘preposterous’ allegations that it made customers sign contracts forbidding them to talk to regulators.
“There is no safety defect with the suspensions in either the Model S or Model X,” the company said in a blog post on Thursday, adding that it has never asked a customer to sign a document preventing them from talking with the NHTSA. “That is preposterous,” Tesla said.
NHTSA said earlier Thursday it is looking into a potential safety issue in the Model S sedans.