Barclays Explains How They Differ From the Tesla (TSLA) Bulls

Tesla Motors (TSLA) price target was lowered from $220 to $200 by Barclays analyst Brian A. Johnson, according to a research note published on Friday. The analysts expressed caution on the name, saying that what fundamentally sets Barclays apart from the Tesla bulls is its skepticism regarding the automaker’s ability to become a successful mass-market car maker.

[via Barron’s]”[W]hile the bulls would argue that Tesla will be the next Ford Motor (F), we argue that there are many challenges ahead for Tesla”, Johnson said, adding that “upon revisiting our margin and delivery estimates, we were reminded yet again that crossing that chasm is harder than it looks, especially in a new era of low oil prices.”

Johnson also reduced his estimates on Tesla’s 2020E EPS now $5.55 vs. prior $13.54, and 2020 deliveries to 370,000 cars, from a previous 426,000 and the company’s own guidance of 500,000 run-rate.

The analyst kept an overweight rating on the stock, noting that he continues to expect “trading to be influenced by the flow of near-term datapoints.” Johnson also said to expects a “headline 4Q beat” when Tesla reports earnings on Wednesday.

Shares in the $27 billion market cap company fell 1.64 percent on Friday to close at $217.36. They’re now up 19.82% year-over-year ; down 2.30% year-to-date.

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