Autopilot Update Drops Tesla Back to $45 Billion Market Cap

TSLA stock is also at a new annual low

Apr 2, 2018 at 10:21 AM
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Coming off their worst month since 2010, shares of Tesla Inc (NASDAQ:TSLA) have entered April sharply lower. Weighing on the stock is a weekend update to last week's fatal Model X crash, which showed the Autopilot function was initiated just prior to the collision. This is overshadowing a Tesla stock upgrade at Jefferies ahead of this week's first-quarter Model 3 production update, with the shares trading down 6.9% at $247.71 -- fresh off a new annual low of $247.17, and now at its $45 billion market cap.

More specifically, Jefferies raised its rating on TSLA to "hold" from "underperform," saying the recent pullback has the shares "back on earth." The brokerage firm added it expects Tesla to unveil supportive measures after releasing Model 3 numbers this week, which could include adjusting its guidance. Baird also chimed in, lowering its estimates to not only Model 3 production, but also Model S and X deliveries, though it expects the former to ramp up to 2,500 units per week sooner rather than later.

Most analysts are skeptical toward Tesla stock, which is now staring at a roughly 20% year-to-date loss. Of the 17 analysts covering the shares, 11 maintain a "hold" or worse rating. However, the average 12-month price target of $322.25 stands at a nearly 30% premium to the security's current perch. This leaves TSLA at risk of price-target cuts should it continue its recent sell-off.

This pessimism is seen elsewhere on the Street, too. Though short interest edged down slightly in the most recent reporting period, there are still 28.38 million TSLA shares still sold short. This represents a significant 22.65% of the stock's available float, or five times the average daily pace of trading.


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