RBC Capital slashes Tesla price target, cuts Model 3 delivery forecast

RBC Capital Markets slashed its price target on electric car maker Tesla on Monday to $210 from $245 as it cut its first-quarter Model 3 delivery forecast.

The bank, which rates the stock at 'underperform', lowered its first-quarter 2019 M3 delivery forecast to 52,500 from 57,000, versus consensus of 58,400.

"We see both 2019 and 2020 revenue as down versus the 4Q18 run-rate and, given Tesla is priced for growth, believe the valuation will come in.

"The back-and-forth on strategy as well as potential legal overhangs are also impediments for incremental buyers of the stock, in our view."

Regionally, RBC assumes around 21,000 units in Europe, 6,000 to 7,000 in China and the rest in North America.

For 2019 overall, it now forecasts around 261,000 Model 3s, down from 268,000, while its 2020 forecast remains unchanged at 347,500. The bank's average selling price estimate for the M3 this year was reduced to $53,600 from $55,500.

For the company's Model S/X, RBC now estimates around 19,200 units in the first quarter, down from 22,500 previously and below consensus expectations of 20,700 units. For the year as a whole, it's now looking for 86,400 Model S/X units versus a previous forecast of 92,800, with an average selling price of around $95,000 compared to $98,000 previously.

As a result of its unit and price changes across the Tesla line-up, RBC's 1Q19 non-GAAP earnings per share estimate was reduced to $0.64 from $0.68 previously.

Tesla is due to report its 1Q19 deliveries early next month.

At 1605 GMT, the shares were down 1.2% to $261.36.