Tesla Inc.’s (NASDAQ: TSLA) shares fell on Tuesday after Goldman Sachs (NYSE:GS) reinstated its sell rating for the electric vehicle manufacturer. Shares were trading 2.4% lower shortly after the opening bell, according to CNBC.
Goldman Sachs analyst David Tamberrino gave a USD 210 six-month price target for Tesla, representing a 30% downside to Friday’s closing price.
“We see the medium-to-longer term industry backdrop as challenging for Tesla’s products; this follows from an increasing number of EV launches from both traditional OEMs and other start-up competitors — at a time when the company’s product cadence hits a gap,” Tamberrino said in a note to clients Tuesday. “We believe the company will see pressure to its lead in EVs as competition catches up.”
Tamberrino noted that other auto manufacturers such as Audi, BMW, Jaguar and Porsche will see significant number of electric vehicles over the next several years due to national governments implementing CO2 emission standards.
“Altogether, we remain bearish on the company’s ability to execute, achieve its targeted production ramp/margins, and sustain FCF [free cash flow] generation.” said Tamberrino.
Few weeks ago, Goldman Sachs suspended its coverage on Tesla shares after the bank said it was acting as the financial advisor “in connection with a matter that is fundamental to the reasonable analysis of the rating and price target for this stock.”
Last month, Tesla Chief Executive Officer Elon Musk was looking to take Tesla private, but since then, Musk decided it was the best interest for the Company to remain public.