Tesla May Have Trouble Reaching Ambitious Targets--RBC

By MarketWatch Pulse

Tesla Motors Inc. was initiated Wednesday with a sector perform rating at RBC Capital, which cited execution risk, dependency on a long time horizon and the company's ambitious growth targets for not having a more upbeat outlook. Analyst Joseph Spak set a stock price target at $280, which is 16% above Tuesday's closing price of $241.46. "Tesla is a transformative company, leading the charge on the electrification of the vehicle powertrain and using their battery cost position to potentially disrupt other end-markets," Spak wrote in a note to clients. "However, in our minds the story begins to shift from one of opportunity to one of execution and that is not without risk." He said he doesn't have "meaningful reason" to doubt Tesla can reach its ambitious targets, he believes doing so in a timely fashion without some growing pains could prove challenging. The stock, which fell 1.8% in premarket trade, has lost 9.9% over the past three months, while the S&P 500 has shed 4.9%. Tesla was also downgraded at RW Baird to neutral.

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