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Analyst Imagines A Year's Worth Of Tesla Tweets From Musk

Analyst Imagines A Year's Worth Of Tesla TSLA Tweets From Musk

Tesla Motors Inc TSLA 2.99% stock is expected to be range bound in the near term, with the upcoming Gigafactory event likely to be a positive, and the Q4 EPS miss and capital raise may keep the stock in check, Barclays’ Brain A. Johnson said in a report. He added that the stock may correct later, on a Model 3 delay.

Johnson maintains an Underweight rating on Tesla, with a price target of $165. He mentioned four tweets that could be expected from CEO Elon Musk in 2017 related to “items investors cared about.”

Tweets Expected

Tweet 1: “Great progress so far on Model 3, but still have a number of tweaks ahead — thus will take a little longer than expected.”

Tesla is likely to announce a Model 3 delay, given the “high risk of execution missteps, a challenged track record on meeting timelines, cost challenges, and potential impact from an otherwise full plate of initiatives in ’17,” Johnson wrote

Tweet 2: “Time to derisk a capital raise.”

The analyst assumed a $1.5 billion capital raise in Q1 2017, while noting that the company had a track record of cash burn and that the markets may not be as accommodating as it had been previously to a capital raise being undertaken to fund operating losses.

Tweet 3: “Slowing the growth at SolarCity until regs more favorable.”

Johnson expects Tesla to “significantly reduce” growth at SolarCity Corp NASDAQSCTY and try to “manage it to be a neutral so that it doesn’t impact its other initiatives.”

Tweet 4: “We don’t need EV subsidies, but we should get some $ for all the U.S. employment we create.”

Since Musk is now part of President-elect Donald Trump’s Strategic & Policy Forum, it may make sense for him to “leverage Tesla’s position as the only automaker with effectively all of its manufacturing in the U.S.,” the analyst concluded.

Jan 2017GuggenheimInitiates Coverage OnBuy
Oct 2016Goldman SachsMaintainsNeutral
Oct 2016Goldman SachsDowngradesBuyNeutral

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