Demand for Tesla (NASDAQ:TSLA)'s Model S sedan and the Model X SUV appears to have peaked, Goldman Sachs analysts said as they downgraded their outlook for the company.
Tesla on Monday said it delivered 22,000 vehicles in the second quarter, fewer than analysts including Goldman's David Tamberrino had expected. Deliveries slowed from a record of 25,000 cars in the first quarter amid issues with the largest battery pack for Tesla's electric cars.
"We believe the excess production above deliveries, the discontinued 'order rate' metrics, and the company’s 2H17 guidance (Model S and Model X deliveries to likely exceed) in combination with the past four quarters of delivery results point to a plateauing of demand for its current products," Tamberrino and his colleagues wrote in a note on Wednesday.
Goldman slightly reduced its forecast for vehicle deliveries this year, and forecast "moderate growth" from 2018 through 2021: a 5% compound annual growth rate versus 13% prior.
They lowered their six-month target price on the stock to $180 from $190, implying a 49% decline from Monday's closing price of $352.62. Tesla shares were down by about 1.5% in premarket trading on Wednesday.
Tesla is preparing for the first deliveries of its Model 3 vehicles on July 28. Tamberrino forecast that the company would miss its production targets for the $35,000 sedan in the second half of the year.
Although the Model 3 is going out two months earlier than Goldman had forecast, Tamberrino remained cautious since Tesla has historically missed delivery and production targets. "We still harbor supply chain concerns and believe a more prudent curve is warranted given historical operational execution," he said.