Tesla's Stock Falls After Analyst Says 'avoid' The Stock

By Tomi KilgoreMarketWatch Pulse

Tesla Motors Inc.'s stock slumped 1.6% in premarket trade Tuesday, in the wake of a downbeat research note from Pacific Crest Securities. Analyst Brad Erikson reiterated his sector weight rating, but said he has become more cautious on the electric-car maker's stock following channel checks. He increased his loss-per-share estimate for 2015 to $1.10 from $1.09, and slashed his 2016 earnings-per-share estimate to 27 cents from 76 cents. "Consistent with our October checks, our latest checks with U.S. sales centers indicate that Model X orders are still lagging expectations," Erikson wrote in a note to clients. "While getting the X to showrooms would help, we don't expect that to happen until later this spring due to production challenges." He said he doesn't believe the Model S promotional offer of 20% off the old lease cost has driven a significant increase to sales. "We can't overstate the importance of the March 29 Model 3 unveiling, but we remain suspicious of underlying demand and would continue to avoid [Tesla's stock]," Erikson wrote. The stock has tumbled 18% year to date, while the S&P 500 has slipped 5.1%.

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