Tesla, Inc. (NASDAQ: TSLA) shares were soaring this past week, even reaching an all time high, now, shares have fallen over 2 percent early morning Tuesday after Jefferies calls for losses for electric car manufacturers.
Jefferies, an investment banking firm, sent a note to its clients stating to avoid electric car related shares within the next few years. The firm reiterated its stance saying that electric car manufacturers will face losses and report weak financial performances for the next few years.
"It is with a bit of a heavy heart that we initiate coverage of Tesla at underperform," analyst Philippe Houchois wrote in a note to clients Tuesday. "Achievements to-date and vision are impressive, but we don't think Tesla's vertically integrated business model can be scaled up as profitably and quickly as consensus thinks and valuation multiples imply."
The firm and its analysts have called for price target of $280, a 27.3 percent drop from Monday’s close of $385.00. According to SeekingAlpha, the negative performance is expected to carry out until 2020.
Tesla has been performing very well in the 2017 fiscal year. Shares have been up 44 percent from the beginning of the 2017 fiscal year to the all time high Tesla hit on Monday of $389.31.
The electric car manufacturer has been manufacturing and deploying state of the art vehicles and even its anticipated launch of the electric semi. The automaker has been outperforming even the other top auto manufacturers.
Tesla did not comment on the matter.