Tesla Stock Slammed With Bear Note After Delivery Data Disappoints

J.P. Morgan Securities lowered its price target

Digital Content Manager
Jul 5, 2022 at 12:19 PM
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The shares of Tesla Inc (NASDAQ:TSLA) are down 2.8% at $663.07, after the electric vehicle (EV) maker reported a worse-than-expected 254,695 units delivered in the second quarter, which marks a 17.9% drop from Tesla's first quarter. The company noted disruptions to its production and supply chains due to Covid-related lockdowns in China. Meanwhile, reports were released last Friday that Tesla was slapped with a recall order from Germany on its Model Y and Model 3 vehicles. 

In response, J.P. Morgan Securities slashed its price target to $385 from $395 and cut its second-quarter and full-year profit outlook. The analyst recognized production slowdowns in Shanghai, but also pointed to "execution issues" at its Austin and Berlin factories. 

When we last checked in on Tesla, the stock was struggling to capitalize on an upgrade from RBC Capital. A broader look at analyst sentiment shows 12 brokerages in coverage carrying a "buy" or better rating, compared to eight "hold" or worse ratings. Meanwhile, the 12-month consensus price target of $893.46 is a lofty 34.3% premium to current levels. 

Options traders, on the other hand, have taken a much more bearish stance in recent weeks. This is per TSLA's 50-day put/call volume ratio of 1.01 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the top-most percentile of its 12-month range. In other words, long puts are getting picked up at their fastest pace in a year. 

Today's price action has TSLA adding to its 37.1% year-to-date deficit, though it's managed to hold above a recent floor near the $630 level. The 40-day moving average kept a late-June rally in check, however, while the stock's 20-day is providing a more immediate ceiling. 

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