Tesla’s (NASDAQ:TSLA) stock fell more than one percent in early trade Wednesday, following a negative note from one of the company’s most steadfast Wall Street bulls.
Robert W. Baird’s analyst Ben Kallo said he reduced his 2019 estimates for Tesla’s total delivery to reflect a slower-than-expected Model 3 ramp and moderating demand for Models S and X. Kallo, who lowered his EPS estimates for 2019 and 2020 to $1.82 and $6.92, respectively, from $3.67 and $12.15, cut his TSLA price target to $400 from $465 while noting that he expected the stock to outperform over time as the company introduces innovative products, increases profitability, and generates free cash flow.
“The narrative on Tesla remains incredibly negative, similar to conditions in the middle of 2018,” Kallo said. “While we acknowledge it may take several quarters for this to shift, we continue to believe sentiment will improve over time as the company proves it can be self-supportive, which should drive sustained share appreciation.”
It’s worth noting that while the analyst stubbornly maintained his “outperform” rating on TSLA, the price target reduction, which represents a 32% upside from Tesla’s current level of $273, is significant.
In other Tesla news this morning, Business Insider reports that Tesla CEO Elon Musk predicted in an interview with MIT research that his company’s vehicles will likely be better at driving than humans by the end of this year. Musk, who has a history of bold predictions, also said that the car maker’s autonomous-driving technology was improving at an exponential rate, and that it appeared to him that Tesla is ahead of its competitors in the autonomous-driving industry.
Shares of Tesla have plummeted about 20% year-to-date and 5% year-over-year. The company is unprofitable on a trailing-12 EPS basis, printing ($5.72). Including its nearly $14 billion debt, the $47 billion market cap company is valued at 37.5x forward P/E.