Tesla results put 'extreme bear case to rest,' says Barclays
The cash generation and stronger margin performance in Tesla's Q3 "put the 'extreme' bear case to rest for a while but doesn't dispel the valuation debate," Barclays analyst Brian Johnson tells investors in a post-earnings research note titled "Extreme bear fears of distress prove misplaced." Further, the analyst feels that while Tesla's profit and improvement "was impressive," it comes after a "rich Model 3 mix" that's unlikely to be replicated. Tesla will soon be facing flat sequential revenue growth and by year-end 2019, slower year-over-year growth, says Johnson. The analyst keeps an Underweight rating on Tesla, but admits he does not have "near-term hopes" of seeing his $210 price target. However, he believes Tesla's "stabilizing growth" makes his "long-term valuation more realistic."