Analyst Downgrades: Tesla Motors Inc, Sunedison Inc, and Rio Tinto plc (ADR)

Analysts downwardly revised their ratings and price targets on Tesla Motors Inc (TSLA), Sunedison Inc (SUNE), and Rio Tinto plc (ADR) (RIO)

by Kirra Fedyszyn

Published on Feb 9, 2016 at 9:25 AM

Analysts are weighing in on electric carmaker Tesla Motors Inc (NASDAQ:TSLA), solar energy concern Sunedison Inc (NYSE:SUNE), and mining issue Rio Tinto plc (ADR) (NYSE:RIO). Here's a quick roundup of today's bearish brokerage notes on TSLA, SUNE, and RIO.

  • After hitting a two-year low of $146.00 on Monday, TSLA -- scheduled to report earnings tomorrow -- is pointed 4.4% lower ahead of the open. Barclays reduced its price target on the stock to $165 from $180, and reiterated an "underweight" rating, with Analyst Brian Johnson citing a disappointing outlook for Tesla Motors Inc's Model X. But Johnson also said the shares could see a short-term rebound after the March unveiling of the Model 3, especially with an unwinding of current bearish sentiment. Specifically, 10 out of 15 brokerage firms now say TSLA is a "hold" or worse, and 28.5% of the stock's available float is sold short. At TSLA's average daily volume, it would take nearly seven days to cover all those bearish positions. Pessimism is also rampant in the option pits, where traders seem to be eyeing post-earnings downside for the shares.
  • SUNE received a price-target cut to $6.50 from $9.00 at Deutsche Bank, sending the shares down 0.6% in electronic trading. Sunedison Inc has been continuing its trek lower over recent weeks, and is off more than 51% in 2016, despite a brief pop in late January when David Einhorn's Greenlight Capital revealed a 4% stake in the company. Still, 11 out of 15 analysts call SUNE a "buy" or better, leaving the door open to further downgrades if the shares continue to underperform. Speaking of which, SUNE has underperformed the S&P 500 Index (SPX) by nearly 44 percentage points over the past three months.
  • RBC Capital initiated coverage on U.K.-based RIO with an "underperform" rating and a $37 price target, while Goldman Sachs lowered its price target on RioTinto plc (ADR) alongside several other mining stocks. The shares are set to drop 5.5% at the bell, adding to their current 9.2% year-to-date loss. RIO has underperformed the SPX over the past three months, and short interest rose 25.3% during the most recent reporting period, but still accounts for just 1.8% of the equity's available float. RIO will announce full-year earnings ahead of the open on Thursday.
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