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Tesla plunges another 5 percent on fears of Model 3 delays


´╗┐Shares of Tesla (TSLA. O) dropped on Monday after a downgrade by Goldman Sachs, bringing the electric carmaker's decline to 11 percent since its quarterly report last week stoked worries about how much cash it is using to launch its Model 3 sedan. Concerns that Tesla's Model 3 production this year might be delayed, as well as expectations the company will sell stock to raise $1.7 billion, led Goldman Sachs analyst David Tamberrino to downgrade Tesla to "sell" from "neutral". That helped push the stock down 4.83 percent to $244.52 in morning trade on Monday. If it closes at that level, it will have been the worst three-day performance for the shares since June last year. Even with the recent drop, Tesla has surged more than 30 percent since early December and is up 14 percent in 2017.

Tesla has traded between $180 and $280 in recent years, and after hitting 2015 highs earlier this month, it may be headed toward the bottom of that range, Tamberrino wrote in a note to clients. Tesla investors and short sellers disagree about whether the company will become a carbon-free energy and transportation heavyweight or be overtaken first by older, deep-pocketed manufacturers such as General Motors Co (GM. N).

Seven analysts recommend selling Tesla's shares, while six recommend buying and seven have neutral ratings. Few stocks on Wall Street attract more "sell" than "buy" ratings. Last May, Goldman Sachs's previous Tesla analyst, Patrick Archambault, raised his rating on Tesla to "buy" from "neutral" hours before the bank helped launch a secondary stock offer for the company.

The timing of the two events attracted attention on Wall Street because banks are required to keep their underwriting activities separate from their broker research.

Wrapup sluggish economies weaken business jet sales


´╗┐Nov 18 Weakening or sluggish economies around the globe are taking a toll on business aircraft sales and prices, forestalling an incipient recovery that had raised the hopes of plane makers and suppliers. Manufacturers attending the industry's largest jamboree this week predicted flat or lower sales next year, and possibly in 2017, before the arrival of new models stirs interest and buying later in the decade to restart industry growth. Prices also are falling. When buying last peaked in 2008, a new Bombardier Global 5000 aircraft, a so-called "super large" jet, cost about $52 million. "Now you can get the same aircraft with a better cockpit for $43 million, almost $10 million less," said Chad Anderson, president of Jetcraft, a major aircraft broker. Such discounts are distorting the market and even affecting used aircraft prices, said Richard Aboulafia, an analyst at the Teal Group.

Amid the weakness, Bombardier scaled back production of Global 5000 and long-range Global 6000 planes. Buyers are more cautions about big plane purchases and more used planes are on the market, industry experts said. Anderson said he expects Gulfstream will have to slow production of some of its G450 and G550 planes, also considered "super large" jets. Gulfstream said it is "evaluating 2016 production rates right now" and will announce them in late January. Even companies positioned with better-selling light and mid-sized jets have concerns. "2016 will be a challenge," said Marco Tulio Pellegrini, chief executive of Embraer Executive Jets, which has seven models mostly in the small and mid-size categories. "It will be as tough as 2015."

The shifts suggest a continued slow recovery from a 2011 nadir. But the activity at the National Business Aviation Association convention shows aircraft makers are not betting on weakness for long, and that a strong recovery is due by the end of the decade."Some countries, where we have good hopes in terms of selling our (Falcon) 7x and 8x long-range planes, like Brazil, like India like China, are getting slow a little bit," said Dassault Aviation Chief Executive Eric Trappier.

He and others see stronger sales in the United States and northern Europe. "So we cannot imagine China staying at this level of growth. It will be back to a better growth. They need to travel because they need to meet their customers," he said. Similarly, Anderson and others said corporations are renewing their jet fleets after the downturn in recent years, and are also taking advantage of lower prices. But there are fewer emotional buyers and more focus on value, he said. Manufacturers also are investing in new models in anticipation. Textron announced plans for a new large business jet, the Cessna Citation Hemisphere, due out in 2019. Fractional aircraft firm Flexjet placed a $2.4 billion order for 20 sleek supersonic AS2 jets from Aerion, with deliveries starting in 2023."Deals will be hard," said Anderson, whose business jet sales forecast predicts 7.4 percent annual growth over the next 10 years. "But with the North American demand that exists, deals can be had. They have to be done at the right price."

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