Goldman Sachs Downgrades Tesla: Concerns Over SolarCity & Model 3

On October 6, Goldman Sachs Group Inc (GS) downgraded shares of Tesla Motors Inc (TSLA) from "buy" to "neutral" over growing concerns regarding a potential delay to the Model 3 launch. The investment bank also noted complications from its acquisition of SolarCity Corp (SCTY).

Goldman lowered its 6-month price target to $185.

Wall Street doesn't know what to think

Sentiment seems to be increasingly volatile for Tesla.

Morgan Stanley (MS) recently issued an "equal-weight" rating with a $245 price target, representing around 25% upside.
Still, it voiced similar concerns to Goldman over near-term issues. Morgan Stanley specifically noted upcoming issues over cash and funding levels.
Goldman Sachs Downgrades Tesla: Concerns Over SolarCity & Model 3
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It's important to note, however, that most Wall Street analysts continue to be very bullish on the long-term potential of Tesla, especially with its new mass-market Model 3 vehicle.

The mixed sentiment seems to stem from issues regarding short-term capital levels and quarterly vehicle deliveries. For example, some analysts are positive on Tesla's ability to execute on its second-half delivery guidance of 50,000 units. Many others are still concerned with ongoing discounting measures and cash flow headwinds.

How should you view Tesla?

Our writers at InvestorGuide have put together a few opinions on the situation:

Avoid These 2 Automakers at All Costs

Tesla's stock has enjoyed great growth due to its apparent potential. Going forward, Tesla may struggle to continue beating its competition.

Elon Musk's Tweets Can't Save Tesla Anymore

Tesla has never traded on the basis of its fundamentals. Now, it looks like Elon Musk is scamming Tesla investors by agreeing to acquire SolarCity.

SolarCity: Great Trading Opportunities Ahead

Given that Tesla plans to acquire SolarCity for roughly $26, the market clearly doesn’t expect the deal to go through. SolarCity is currently almost 30% under its likely buyout price, which makes it a good speculative play.
Published on Oct 7, 2016
By Ryan Vanzo
Ryan Vanzo is the Digital Business and Finance Editor at WebFinance Inc, which runs,, and You can reach him at

Copyrighted 2020. Content published with author's permission.

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