Tesla Fire: This Analyst’s Expectations Aren’t Going Up in Flames
Tesla’s (NASDAQ:TSLA) stock sunk to new lows Wednesday, falling 6.24 percent and marking its steepest decline since July 16 of this year when it fell 14 percent. Several factors contributed to the increased investor doubt, but a Deutsche Bank analyst Dan Galves alleviated worry Thursday morning when he reiterated his Buy rating and $200 price target on Tesla Motors.
One factor that contributed to Tesla’s sharp stock decline Wednesday was its Model S sedan that caught fire earlier this week, sparking speculation that the vehicle’s new electric battery caused the incident. Jalopnik first published the piece about the fire on Washington State Route 167 Tuesday, and a video of the vehicle on fire then quickly ripped through the Internet.
The new technology and the sensitivity over its safety made a stock decline seem inevitable. However, according to Street Insider, although Galves recognizes “that negative news flow and investor concern over how this incident may impact demand will put negative pressure on the stock in the near-term,” he maintained that the fire was bound to happen and it thus didn’t change his original thesis. Of the 15 analysts who cover Tesla stock, Galves is now only one of six who have issued buy-equivalent ratings on Tesla, but he maintains his confidence.