A month after it suspended its coverage of Tesla, Goldman Sachs got back into the Tesla assessment game on Tuesday. And its view of the electric carmaker won’t be making Tesla Chief Executive Elon Musk smile any time soon.
In a research note, Goldman analyst David Tamberrino set a sell rating on Tesla’s stock, and said he believes Tesla’s share price will fall to $210 within the next six months. That figure represents a decline of more than 30 percent from the $301.66 a share closing price from last Friday.
Tamberrino said his negative take on Tesla comes from a belief that the company will soon begin to see its market share hampered by increased competition and new entries into the electric vehicle market.
“We see the medium-to-longer term industry backdrop as challenging for Tesla’s products,” Tamberrino said. “This follows from an increasing number of EV (electric vehicle) launches from both traditional OEMs (manufacturers) and other start-up competitors.”
Tamberrino added that he believes production and delivery levels for its Model 3 sedan will help Tesla reach a positive free cash flow in the second half of the year, but the company will struggle to maintain that position next year “as working capital tailwinds abate and as spending ramps back up after a period of cash conservation.”
Tesla CEO Elon Musk recently dropped his controversial effort to take Tesla private for $420 a share.
Goldman Sachs had given up its coverage of Tesla in August, when the company said it was acting as a financial adviser to Tesla in a situation it described as “fundamental” to the company’s activities.
Tamberrino’s move was the second major negative take from Wall Street regarding Tesla’s stock price in the last two weeks. On August 20, J.P. Morgan analyst Ryan Brinkman slashed his price target of Tesla’s stock to $195 a share from $308.
Tesla shares fell 2.4 percent, to $294.50, in the wake of Goldman Sachs setting its sell rating on the company’s stock.
