Tesla shares are down nearly 20 percent so far this year and at least one analyst believes there's more pain to come—and most of that has to do with one of the company's latest models.
CLSA Americas Analyst Andrew Fung, downgraded the stock to an "underperform" rating from an "outperform," while slashing his price target down to $220 from $275. His biggest concern? The Model X.
The new car will be Tesla's first attempt at a sports utility vehicle. CEO Elon Musk has promised a car that will be able to seat seven adults, will have improved all-wheel drive and will be equipped with falcon–winged doors.
"Some of the misconception really is that while the Model X is a derivative of the Model S sedan, there are other complexities in the new design so initial margins may not be as strong as what investors are anticipating, " Fung told CNBC's "Fast Money" this week.
He added in his note that lower initial Model X margins are likely to hurt earnings in the short term, and limit upside potential in the stock.
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