Tesla (TSLA) Should Come Under Pressure From SEC Escalation, Reit Sell At Citi

February 26, 2019 6:36 AM EST
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Price: $670.94 -0.39%

Rating Summary:
    21 Buy, 21 Hold, 11 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 19 | Down: 13 | New: 24
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Citi analyst, Itay Michaeli, reiterated his Sell rating on shares of Tesla (NASDAQ: TSLA) after the SEC filed court documents asserting that Tesla’s CEO, Elon Musk, was in contempt of last year’s settlement agreement. Recent tweets from Elon Musk had to be corrected and weren’t pre-approved by Tesla as required by the settlement agreement. Tesla’s asserts that the tweets were thought to be mere repeats of prior public communication.

The analyst stated "We view this escalation as a negative and expect Tesla shares to come under pressure at least until some clarity is achieved. Though it’s difficult at this stage to predict an outcome (which can plausibly range from nothing material/additional fines to, at the extreme, a CEO removal), this escalation comes at a more delicate time for the company after recent management departures (including CFO), the ongoing Model 3 international expansion and looming debt maturities. Time is a factor too. Recall that last year Tesla and the SEC settled very quickly (over a weekend), which was a clear positive for Tesla at that time in helping mitigate the risk of a confidence spiral. In our view, the longer this new escalation drags out the greater the likelihood of negative consequences to Tesla’s fundamental position".

No change to the price target of $273.

For an analyst ratings summary and ratings history on Tesla click here. For more ratings news on Tesla click here.

Shares of Tesla closed at $290.42 yesterday.

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