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Tesla Motors ( TSLA ) stock powered up in morning trading Monday in the afterglow of its Model 3 launch, then took a hit as a new Model X recall came to light. Tesla rose as much as 3.6% in the stock market today , then dipped and fluctuated in the afternoon, closing down 0.1% at 249.92 as the major stock indexes also edged down. Tesla stock is 14% off a Sept. 14 all-time high of 291.42. Tesla has climbed to an IBD Composite Rating of 61 out of a possible 99 and the stock is building the right side of a long, deep base — though Tesla’s string of quarterly losses is weighing its Composite Rating down. Tesla’s CR leads automakers, with Fiat Chrysler ( FCAU ) next at a 56, Ford ( F ) with a 53, General Motors ( GM ) with a 47 and China electric-car maker Kandi Technologies Group ( KNDI ) with a 46. Model X Recall Tesla said Monday that the recliner in a third-row Model X seat unexpectedly slipped in a seat-test strength test. Tesla issued a voluntary recall of 2,700 Model X vehicles, according to a Bloomberg report citing an email to affected customers . “Until the recall is performed, you may make full use of your Model X, although we ask that you temporarily not have anyone sit in the third-row seats while the car is in use,” Bloomberg reported the email as saying. The Model X crossover started shipping to customers in September. Recalls are pretty common. Carmakers issued 30 of them covering 6.9 million vehicles industrywide in February, the latest month tracked, according to a March research note by Stifel analyst James Albertine. Tesla’s still a startup, under the microscope for production quality and for how any recalls could potentially impact its necessarily large production ramp-up plans. Model 3 Launch Tesla’s first week of fully refundable $1,000 Model 3 reservations topped 325,000 , the company said early Thursday, saying that it would be “increasing Model 3 production plans.” Tesla noted that if all those reservations result in a sale, the batch would be worth $14 billion in revenue. Deliveries are scheduled to start in late 2017. In a research note April 1, Albertine said that his $325 long-term target price on Tesla stock “is predicated on a model assuming 200,000 units produced annually in 2020, which is substantially lower than TSLA’s guidance for 500,000 units annually. The initial Model 3 reservations reduce our concerns with respect to achieving management’s guidance at some point in the next 5-7 years, but given the complexity associated with vehicle manufacturing and the fact that TSLA has little incentive (besides investor appetite for delivery growth and GAAP profitability) to accelerate production at the expense of quality, protecting against the risk of a major recall.” How Soon Can Tesla Build 325,000 Model 3 Cars? Scalper1 News
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