Tesla's Stock Drops After Analyst Downgrade

By Tomi KilgoreMarketWatch Pulse

Tesla Motors Inc.'s stock dropped 1.9% in premarket trade Wednesday, after the electric car maker was downgraded at RW Baird, which cited uncertainty over the timing of Model X deliveries and lack of near-term catalysts. Analyst Ben Kallo lowered his rating to neutral, after being at outperform since January 2014. He slashed his stock price target to $282, which is 17% above Tuesday's closing price of $241.46, from $335. "It remains unclear...when initial [Model] X deliveries will occur (besides launch event deliveries), and production ramp could take longer than expected," Kallo wrote in a note to clients. "With limited visibility to positive catalysts until the release of the Model III prototype, we are moving to the sidelines." Tesla unveiled itsnew Model X SUV last week. The stock has lost 9.9% over the past three months, but was still up 8.6% year to date, while the S&P 500 has declined 3.8%.

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