RBC Capital Downgrades Tesla (TSLA) to Underperform

(Updated - January 23, 2019 4:37 AM EST)

RBC Capital analyst Joseph Spak downgraded Tesla (NASDAQ: TSLA) from Sector Perform to Underperform with a price target of $245.00 (from $290.00).

The analyst believes the valuation reflects lofty expectations.

He comments "The company seems to be more tactful with messaging which is a long-term positive, but means downward pressure to growth expectations - which in our view are too high to justify current levels, let alone to add to positions."

Further, the analyst said a review of potential supply capacity and demand raises concern. "On supply, we believe a reasonable max Model 3 production range for Tesla 260-312k," Spak commented. "On demand, the $2k price cut and talk about having to lower cost further as federal tax incentives subside confirms our view that the bulk of demand is at a lower price point that Tesla can't access yet profitably. Consensus is expecting 300k M3 deliveries, so near all out. RBC at 260k deliveries."

For an analyst ratings summary and ratings history on Tesla click here. For more ratings news on Tesla click here.

Shares of Tesla closed at $298.92 yesterday.

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