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Tesla shares slide premarket as Goldman Sachs slashes price target to $158 from $200

Tesla Inc. shares fell 1.5% in premarket trade Thursday, after Goldman Sachs slashed its stock price target to $158 from $200 on concerns the company can meet estimates for the second half and beyond. Analysts led by David Tamberrino said they expect the second quarter to be fine and come close to FactSet consensus for volumes, estimates for the second half look high, “considering there are fewer levers to pull to stoke demand going forward (i.e., company released lower priced variants of the Model 3, a leasing option was introduced, and right-hand drive orders have begun).” With the Federal tax credit due to step down again on July 1, second-quarter demand is likely not sustainable, the analysts wrote in a note to clients. Investors should be asking what are the sustainable levels for Model S, Model X and Model 3, they wrote, and how will that change with the introduction of the Model Y, which will likely cannabalize part of the customer base for other models. “We maintain our Sell rating on shares, but lower our 12-month price target to $158 (from $200) as we see a lower probability of the company achieving our upside volume scenarios; we believe a downward path for shares will resume as it becomes more clear that sustainable demand for the company’s current products are below expectations,” said the note. Tesla shares have fallen 32% in 2019 to date, while the S&P 500 has gained 16.7%.

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