The most valuable car company in the US is in for a rude awakening according to Goldman Sachs analyst David Tamberrino. Tamberrino just lowered his six-month price target for Tesla from $190 down to $180 which is 49 percent less than where it was at Monday’s market close, according to CNBC.
This prediction comes from signs that sales of the Model S sedan and Model X crossover have plateaued. Goldman Sachs, which predicted the Model 3 would be late, thinks that pretty much everybody who wants a Tesla already has one. What about the Model 3, you ask? Tamberrino thinks it’s overhyped.
"We remain sell rated on shares of TSLA where we see potential for downside as the Model 3 launch curve undershoots the company's production targets and as 2H17 margins likely disappoint," Tamberrino wrote in a note to clients this morning. "This comes as demand for TSLA's established products (Model S and Model X) appear to be plateauing slightly below a 100k annual run rate."
Tesla had a rough second quarter selling only 22,000 cars which were fewer than Tamberrino’s forecast of 23,500 deliveries. That means even Tesla skeptics are surprised with their underwhelming performance so far this year. Tamberrino also believes that “cash burn should intensify as we progress through 2017” for Tesla.
This report from Goldman Sachs is part of the reason Tesla’s stock was down 5 percent in just the first hour of trading on Wednesday. With budding competition for the much-hyped Model 3 and possible plateauing for the Model S and Model X, Tesla might be facing some difficulty on the trading floor for the rest of 2017.