Bank of America is predicting a massive Tesla collapse - yahoo
By Matthew DeBord | Business Insider – 11 hours ago
...John Lovallo, an analyst at Bank of America Merrill Lynch, shook up Tesla bulls on Monday when he published a research note asking fundamental questions about the electric-car maker's prospects.
He also cut his price target to $65 from $70.
Tesla is trading at about $203 per share, a significant decline from its 2014 peak of $291, but a huge increase from the 2010 IPO price of $17.
For some time, Lovallo has been on the low end of analysts who cover Tesla. He's the biggest Tesla bear on Wall Street. Otherwise, opinion on the company is all over the place. Stifel Nicholas' James Albertine is the biggest bull, with a $400 price target. Other analysts are more cautious, with price targets in the ballpark of the stock's 2014 high. JP Morgan's Ryan Brinkman is the most cautious of the cautious set, with a target of $180.
Morgan Stanley's Adam Jonas is something of an outlier, with a juicy $280 price target but a complex thesis about Tesla. He thinks that it will remain more of a niche carmaker, not a mass-market brand — and to that end, he's skeptical about Tesla's ambitious growth prospects.
Given that Tesla missed on earnings expectations for its fourth quarter and was unable to deliver 1,400 cars (out of a total of 35,000) in 2014, all eyes are now focused on whether the company can justify its still lofty stock price and $26 billion market cap.
That's why Lovallo's bearishness is important. He's predicting a nearly 70% decline in Tesla's stock price...