Tesla shares are primed to mark a grim milestone

Tesla is on track to log its first negative year in its life as a public company.

This year has been a hectic one for the electric-automaker, which has seen its shares slip nearly 18 percent year to date. It is closing in on a $2.6 billion acquisition of solar energy provider SolarCity, of which Tesla CEO Elon Musk is chairman. And reports of fatal Tesla car crashes in the U.S. and abroad have pushed the stock lower after prompting questions about safety of the company's self-driving technology.

Tesla opened down over 2 percent Thursday after Cowen initiated coverage of the stock with an underperform rating and a price target of $160, about 20 percent below its current price.

"The company, while fundamentally well positioned for the long term, has a material amount of execution risk over the next 12 to 18 months," Cowen said in a research note, adding the SolarCity acquisition "only adds an additional layer of complexity" when Tesla should be focused on completing the Gigafactory (the company's Nevada lithium-battery factory) and the launch of its Model 3.

Erin Gibbs, equity chief investment officer at S&P Global, said Wednesday on CNBC's "Trading Nation" that she views Tesla "as a complete sell for multiple reasons."

"Elon Musk loves to make these wonderful targets that are never, ever achieved," Gibbs said. "I'm surprised that investors aren't a little more frustrated."

Gibbs said the company's proposed acquisition of SolarCity announced earlier this year is a "distraction," and a "drain on the cash flow, which they really need as a company that's supposed to be growing 50 to 60 percent per year," referring to a November 2014 earnings conference call on which Musk forecasted such growth in years to come.

Others may be less bearish on the automaker.

"If you got to put it into a buy-sell-hold category, I am a hold. I would be a seller on a break below $180, because that's going to be a big change in sentiment toward the stock," Craig Johnson, senior technical research analyst at Piper Jaffray, said Wednesday on "Trading Nation."

Johnson noted from a technical standpoint, the stock has been "stuck sideways for the better part of three years, just stuck in a trading range."

The average rating of Tesla, according to FactSet data, is a "hold," though estimates show its average target price of $243.53, about 23 percent above its current price.

Johnson said if investors are looking for names that will outperform in the last few months of the year, Tesla won't be among them.

"I would move on to other names that look more attractive, like Apple, for example."


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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