JPMorgan analyst Ryan Brinkman lowered his price target for Tesla (TSLA) to $215 from $230 and keeps an Underweight rating on the name after meeting with management. The stock closed yesterday up $3.79 to $278.62.
The addressable market for the Model 3 in Europe may be higher than the U.S., "although brand perception still lags in some countries," Brinkman tells investors in a research note. Further, the analyst believes Tesla's working capital headwinds are expected to weigh on free cash flow in Q1. The results this quarter are also "particularly susceptible" to potential delays in delivering Model 3s to customers in Europe and China, says Brinkman.
In addition, he thinks Model 3 average selling prices likely peaked in Q4 of 2018. The analyst reduced his estimate of Q1 deliveries following reports of delays in shipping Model 3s to customers in Europe and China. Brinkman's estimate of Q1 Model 3 deliveries declines to 50,000 from 55,000, total deliveries go to 70,500 from 75,500, and adjusted earnings per share drops to 38c from 94c. His full-year 2019 earnings per share estimate goes to $4.25 from $4.50 and 2020 estimate to $6.75 from $7.00.
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