Goldman Sachs Just Cut Tesla’s Price Target for This Reason

Goldman Sachs is not feeling Tesla and reiterated a “sell” rating this week.

The firm also cut its 12 month price target on the electric vechile making giant from $205 to $195, representing a 32% downside.

According to analyst David Tamberrino, “We see the company likely sustaining Model 3 production around the 1,400 per week mark.”

The firm is concerned that Tesla will not be able to meet its Model 3 production targets and has predicted that the company may be forced to raise even more capital as soon as Q3.

“We believe the sustainable production rate for the second quarter of 2018 is most likely below the 2,000 vehicle mark the company achieved in the final week of the [first] quarter,” wrote Tamberrino in a note to clients.

He also wrote, “Although the company stated that is does not require a capital raise this year, we note that this is predicated upon a sustained 5,000 per week production rate achieved exiting the second quarter of 2018. Beyond a required capital raise to continue to fund the launch of the Model 3 program, the company would likely still need outside capital in the future for capacity and product expansion.”

Disclaimer: We have no position in Tesla Inc. (NASDAQ: TSLA) and have not been compensated for this article.