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The Zacks Analyst Blog Highlights: Tesla, Ford, General Motors, Toyota and Volkswagen

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For Immediate Release

Chicago, IL - April 3, 2018 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Tesla TSLA , Ford F , General Motors GM , Toyota TM and Volkswagen VLKAY .

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Here are highlights from Monday's Analyst Blog:

4 Key Reasons for Tesla's Recent Selloff

Shares of Tesla plummeted over 7% on Monday morning, as part of a roughly 25% month-long decline. The electric car maker's recent downturn has seen investors flee based on a slew of major concerns. Let's take a look at four of the biggest.

Model 3 Production

Analysts at Jefferies believe that Tesla most likely fell short of its own first quarter Model 3 production goals. Tesla estimated that it would deliver 10,000 mass-market Model 3s in the period and eventually reach a production target of 2,500 vehicles per week.

There is no guarantee that Tesla will fall short of its own production projections. But Jefferies analyst Philippe Houchois wrote in a note to clients on Monday that it's "about the magnitude of the miss."

Accident

It has been more than a week since a Tesla crash sparked new worries about the company's semi-autonomous autopilot system. Tesla recently released some of its initial findings on the deadly accident, which stated that the driver had time to put his hands back on the wheel and react to autopilot-related warnings.

However, the National Transportation Safety Board announced that it is "unhappy" that Tesla revealed some detailed information about the accident because the NTSB's probe into the crash is ongoing.

Recall

In a move that might scare investors even more than an accident, Tesla announced late last week that it will voluntarily recall roughly 123,000 Model S sedans. The electric automaker issued the new recall after Tesla found that some of its bolts could corrode in cold weather and possibly lead to a power-steering failure.

The recall only impacted Model S vehicles built before April 2016, but Tesla's latest recall marks the third time the Model S has been recalled since it first came to market. This latest recall also accounts for a substantial portion of total Tesla vehicles sold.

Tesla sold just 102,807 cars last year, and the more expensive Model S sedan and Model X SUV made up most of the sales.

Debt Concerns

Last week, Moody's downgraded Tesla's credit ratings to "negative" from "stable," pointing directly to Tesla's Model 3 production woes and worsening financial picture. This downgrade helped illuminate Tesla's current debt figures.

The company has to cover $1.2 billion of debt that comes due by 2019. On top of that, Tesla's 2025 bonds were yielding roughly 7.7% last week, while the notes sunk to a low of 86 cents on the dollar.

Tesla will clearly take on new debt in order to boost production of its mass-market Model 3, but it will likely come at far less favorable rates as Tesla continues to bleed cash.

The company's inability to turn a profit is compounded by the fact that while Tesla and CEO Elon Musk overpromise and under deliver on production, the likes of Ford, General Motors, Toyota, Volkswagen and other proven automakers have entered the electric vehicle market.

Worse still, our current Zacks Consensus Estimates are calling for Tesla to post an adjusted loss of $7 per share in its current fiscal year, even as revenues are projected to climb by 60%.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Ford Motor Company (F): Free Stock Analysis Report

General Motors Company (GM): Free Stock Analysis Report

Tesla, Inc. (TSLA): Free Stock Analysis Report

Toyota Motor Corporation (TM): Free Stock Analysis Report

Volkswagen AG (VLKAY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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