Tesla Stock Gets Downgrade From J.P. Morgan

Analysts at J.P. Morgan on Thursday downgraded shares of Tesla Motors Inc. to underweight, from neutral, on Tesla's missed fourth-quarter results. They also cited execution risk as the company aims to be larger, lower fuel prices potentially denting demand for Tesla's future mass-market car, and increased competition for Tesla's electric cars. Tesla on Wednesday reported a surprise fourth-quarter loss and missed its 2014 delivery goal. That underscored "the execution risk associated with scaling production ─ a concern we have struggled with for some time in the context of the firm's clearly demanding valuation," the J.P. Morgan analysts said. Tesla kept its delivery guidance of 55,000 cars in 2015, and has said it aims for 500,000 in 2020 and "millions" in 2025. "Even presupposing the demand for these vehicles will be there ... there is also the matter of being able to produce these vehicles at the desired margin rate, for which we think there is some doubt," the analysts said.

Copyright © 2015 MarketWatch, Inc.