Piper ‘unsurprised’ by Tesla decision to cut prices in China

After Tesla announced "a relatively significant price cut" in China last night, Piper Sandler analyst Alexander Potter said he was "unsurprised" by the decision given that he has been flagging this risk for several months. If Tesla’s China-related volume, mix, fixed costs, and input costs don’t change materially, then this price cut could drive Tesla’s EPS downward by about 70c per share over the course of a full year, but using those assumptions about a lack of changes in those factors "is a big if," Potter said. He maintains an Overweight rating and $340 price target on Tesla shares, which are up $2.14, or 2%, to $112.48 in Friday afternoon trading.