After the note, Tesla shares closed up 1 percent Monday.
The firm slashed its December price target for Tesla shares back to $195 from $308, representing 36 percent downside to Friday's close.
"We are reverting to valuing Tesla shares on the basis of fundamentals alone, which entails a $113 reduction in our price target back to the $195 level where it stood prior to our August 8 note," analyst Ryan Brinkman said in a new analysis. He told clients the price target increase to $308 on that date had been based on a 50 percent probability that Musk had in fact secured funding to take Tesla private at $420 a share. Musk made that claim in a tweet on Aug. 7.
"Our interpretation of subsequent events leads us to believe that funding was not secured for a going private transaction, nor was there any formal proposal," Brinkman said in his latest note.
He reiterated his underweight rating for the carmaker.