Tesla price target lowered to $115 from $120 at JPMorgan

JPMorgan lowered the firm’s price target on Tesla to $115 from $120 and reiterates an Underweight rating on the shares post the Q1 results. The analyst says 100% margin regulatory credit sales totaled $521M in Q1 versus JPMorgan’s estimate of $275M. This suggests a lower quality of earnings, given that regulatory credit sales tend to be lumpy and are also not thought to be part of the long-term story as other automakers reduce their reliance upon purchased credits as they transition their own portfolios toward electric vehicles, the analyst tells investors in a research note. The higher credit sales in Q1 relative helped mask the earnings impact of the roughly 10% price cuts Tesla instituted, says the firm. It reduced estimates to reflect Tesla’s lower margins.