Tesla believer Jefferies slashes price target but still recommends buy

Nevertheless, Jefferies judged the current negativity around demand "excessive" and said that one of investors' main concerns, the efficiency of the company's Model 3 production, was improving. Jefferies therefore decided to maintain its 'buy' recommendation.

“Financial performance should remain volatile in coming quarters as manufacturing and model range expand”, said the experts.

“We cut estimates and 12-month PT to reflect that. We continue to see value in Tesla's technology lead (powertrain and AV development) and focus on increasingly affordable price points in an industry vs other OEMs in a zero/negative EV sum game.

“We got it wrong so far this year but remain convinced there is significant value in Tesla. For a recent convert, the 2019 correction has been humbling but we also feel that the disappointments of Q1 (Model S margin collapse and bigger than expected WC expansion) can be fixed in the course of 2020 and stabilize earnings and FCF (incl emissions credits),” the broker said in a research note sent to clients.

Tesla shares were down by roughly 34% year-to-date and as of 1519 BST were trading 0.44% lower to $218.65.