Tesla Motors Inc (NASDAQ:TSLA) stocks are vastly overvalued, believes Bank of America Corp (NYSE:BAC) analyst John Lovallo. The Bank of America analyst maintained his view on Tesla Motors Inc (NASDAQ:TSLA) shares, saying that it is “vastly overvalued from a fundamental standpoint” and assigned 12 month price target of $45, which is strikingly low when compared to a 52 week high of $194.50, attained just three weeks ago.Tesla

Most cautionary note since May

Analyst John Lovallo said that there are chances that retail investors could be playing risk as institutional ownership of Tesla is declining.  He said that investors are following the bullish trend, but one should consider what will happen when investors’ sentiments shift the momentum that is driving the stock.  Also, Lovallo feels that the upside trend has started to phase out slowly due to recent events like the Model S accident and the NHTSA investigation into the matter along with rumors that the company is losing momentum in its European expansion.

Tesla Motors Inc (NASDAQ:TSLA) shares are trailing their September 30th closing price of just over $193 per share and they’re down 12% since then. Though this decline could seem like a passing phase when compared to the year-to-date tremendous growth in the share, analysts  believe the downside trend around Tesla stock could be real.

Bank of America gave the most cautionary view on Tesla Motors Inc (NASDAQ:TSLA) since Tesla peaked in May, and since then institutional investors are shedding off their stocks. However, retail investors are just following the trend and buying shares. While some have made fortunes from investing in the stock, there’s a good chance that in the short term, trading losses may weigh on some.

Tesla 3Q, numbers to watch

Shares of the Palo Alto electric car manufacturer have recovered after the Model S fire accident, but there is a large amount of volatility as the company posts its third quarter earnings within two weeks.

Tesla is set to post its third quarter earnings on November 5 where factors like company sales volume numbers and a report on its development in Europe and GAAP / non-GAAP performance will be taken note of.

Tesla Motors Inc (NASDAQ:TSLA) reported profit in the second quarter from a non-GAAP point of view, but logged in loss from the GAAP perspective as it excludes carbon credit sales revenue, and didn’t treat the interest saved by paying a government loan back nine years early as income.