Tesla loses 4% as Cowen analyst forecasts it to miss the sales target for the fourth quarter

Following a forecast by an analyst that Tesla Inc. can be expected to fall shy of the sales target in Q4, share prices were seen down by 4% on Monday. The estimate was even pronounced as it also claimed that 2020 may also see the share prices drop by 50% for Tesla.

According to Tesla’s announcement that 2019 will mark 360,000 to 400,000 vehicles sold, the U.S based electric car manufacturer will have to secure 105,000 sales in the fourth quarter in order to touch the lower end of this estimate.

Jeff Osborne Of Cowen Expects The Company To Note 101,000 Sales In Q4

As per Jeff Osborne of Cowen, however, the company is likely to post around 101,000 sales in the fourth quarter. He cites softer than expected demand for Tesla’s Model X and Model S to contribute to the missed sales target in Q4.

The auto analyst has remained bearish about the car manufacturer’s performance in the stock market for a few months. His current estimate has been revised from the previous, even lower forecast of 95,000 vehicles in Q4. His current price estimate of $210 for the upcoming year has also been raised from the previously anticipated $190. Considering that Tesla has recently hit the $420 mark, if Osborne’s estimate turns true, that’ll mark a shocking 50% decline in its stock.

CEO Elon Musk had tweeted last year that if the company hits the $420 mark, that it did in the past week, he would consider taking it private. An official statement about any such plans from Musk, however, has not been received following the record high of $420.

Tesla To End The Year Trading 24% Higher

According to Osborne, if Tesla falls short of the sales estimate for the fourth quarter, it will have a stronger than expected effect on share prices. Even after the 4% decline on Monday, Tesla continues to trade 24% higher to end the year.

In an announcement on Monday, Tesla also expressed confidence that its sales are likely to increase in the upcoming months as the Shanghai factory has already started delivering the first batch of its electric vehicles that were entirely manufactured in China. Add it to Tesla’s another venture of entering the pickup trucks market with its all-new CyberPunk electric truck, it is evident that Tesla has different aims altogether for its sales and overall performance. This is, however, not the first instance of a largely downbeat forecast for Tesla. Only recently, Morgan Stanley’s analyst had also forecast mid $200 range for Tesla in 2020.

Neither the CEO nor the company representatives commented on the analysts’ estimate so far.