Tesla shares fall on sales growth worries
Shares of Tesla tumble on worries about near-term sales growth
NEW YORK (AP) -- Shares of Tesla Motors Inc. tumbled Tuesday on worries about just how much the electric car company's sales can grow.
THE SPARK: In a note to investors looking at the overall automotive industry, Goldman Sachs analyst Patrick Archambault set a price target for Tesla stock of $84, well below the $127.26 the shares closed at on Monday.
THE BIG PICTURE: Shares of Tesla, based in Palo Alto, Calif., have soared in recent months, boosted by positive sales data for its Model S sedan. Its share price has nearly quadrupled since the start of this year.
The company currently sells only the $70,000 vehicle, but its "X'' SUV is slated for the second half of 2014 and the "Gen III," which will be half the price of the Model S, is set to hit the road in three or four years.
THE ANALYSIS: Archambault said Tesla could sell as few as 105,000 vehicles, which could make its stock worth $58, or as many as 200,000, which could push the stock to $113.
Averaged along with a more moderate prediction of 150,000 vehicles, which would imply a price target of $83, Archambault came up with his current price target of $84.
THE SHARES: Down $11.44, or 9 percent, to $115.82 in heavy midday trading after dropping as low as $114.61 earlier in the day.
