By Senad Karaahmetovic

Philippe Houchois (an analyst at Jefferies) lowered the Tesla (NASDAQ;) price target from $1.250.00 the previous day to $1.050.00. This was due to lower estimates and rising risks.

The new estimates for FY output suggest a 5% drop to 1.415million. This is due to production losses in Shanghai and slow starts in Austin. The analyst expects 257k units to generate revenue in the quarter of $16billion. This will be accompanied by an auto gross margin at 26%. Estimated Q2 EBIT at $1.86B

Houchois sees an increased risk profile as “long-held fears of disruption from inside have come true.” The analyst then moved to discuss Elon Musk and the ongoing Twitter (NYSE:) that continues to weigh on Tesla’s risk profile.

“Enemy inside” and “Tesla bigger than Musk” is how we have for years framed the risks from Tesla’s unconventional leadership and weak governance. Although it is difficult to pinpoint the causes of this recent correction (from Nasdaq to Twitter financial commitments to China lockdowns and Twitter financial engagements to China lockdowns), we can see an unpleasant pile-up of negative news, from ratings to polarizing opinions to ethical questions. His personality suggests resolution depends on him alone,” Houchois wrote in a note before adding:

“The “low-filter” communication style can be unsettling although we find it usually helpful as Mr. Musk freely shares what is on his mind and implications for Tesla, from raw material shortages to manufacturing challenges or future automation. We also note that the loss of key executives from CFO Ahuja to JB Straubel and head of manufacturing Guillen did not stop Tesla going from strength to strength.”

Net-net, the analyst reiterated a Buy rating as the EV company is likely “to continue generating FCF cash faster than it can build physical product and capacity.” For him, the trillion-dollar question is: How many models are needed to take global share to 5 or 15%?

Yesterday’s closing price of Tesla stock was $658.80