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Tesla shares could fall to $ 10 at worst

A Tesla Model S (L) and a Model X will be exhibited on March 10, 2019 at a mall in Hong Kong.

Vivek Prakash | AFP | Getty Images

Morgan Stanley lowered his Worst Case Forecast for Tesla's stock on Tuesday from $ 97 to just $ 10, citing concerns over the company's increased debt burden and geopolitical exposure.

In particular, Morgan Stanley analysts said the decline was due to concerns over China's demand for Tesla products.

"Our revised bear case predicts that Tesla will miss our current Chinese volume forecast by about half to account for the extremely volatile trading environment in the region, especially in technology areas, which we consider to be a high and growing risk to attention governments and regulators. " The research report states:

Tesla shares fell to nearly $ 200 on Monday after Wedbush lowered its price target from $ 275 to $ 230, as some of the "science fiction" CEO Elon Musk's impact on the company's ability to support demand for its core model 3.

The stock closed on Monday at 2.7%, closing at $ 205.36 and down 38% since the start of the year. During intraday trading on Monday, the stock fell below $ 200 for the first time since December 201

6. On Tuesday morning, the share was down 2.6% in premarket trading.

But it's not just the Tesla bears who make cautious calls. Financial services firm Baird lowered its estimates for Tesla on Tuesday, cutting its shares from $ 400 to $ 340. For years, one of Tesla's biggest investors, T. Rowe Price sold around 81% of its shares in the first three months of 2019. [19659009] Baird analysts suggested that Musk recently emailed its employees a "hard core effort to reduce costs, which was likely to heighten investors' concerns about profitability," and identified Tesla's communications as the main reason for the weakness the share.

The note argued that concerns over demand were exaggerated and affirmed Baird's claim that the stock will outperform over time as (Tesla) introduces innovative products, increases profitability and generates free cash flow slines "when the stock price falls to a level that could affect business fundamentals.

In April 2019, Tesla reported that sales were down 37%, while vehicle sales declined 31% from the fourth quarter.

According to Reuters, five analysts rate the Tesla share as "buy" and five others as "buy", with nine analysts holding a "hold" rating and nine more "sell" ratings Reuters Eikon has three analysts a "strong sell rating."

A Tesla spokesman was not immediately available for comments when contacted by CNBC.

Michael Bloom of CNBC contributed to this article. [19659015] <! – ->

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