Why Tesla shares fell 4% on Monday

adze (TSLA 4.57%) the stock was up 4% by 12:55 pm ET Monday after Barclays CapitalDan Levy predicted the company would beat expectations on Q3 shipments this year.

That do what sounds like good news for investors — but remember to read the fine print.

What Barclays said about Tesla

In the morning note, Levy said Tesla is likely to report 8% year-over-year growth in electric car shipments, which is more than other analysts are predicting, StreetInsider reports. Specifically, the Barclays analyst sees Tesla delivering 470,000 cars in the quarter, versus consensus projections for 461,000 units. In addition, Levy predicts that Tesla’s profit margins, which have been under pressure, will revive “modestly” in the quarter.

That’s the good news.

The bad news is that Levy thinks most investors already are EXPECTING Tesla to beat consensus numbers, so a positive surprise on deliveries might not move the stock as much as it might if investors were more fearful of a miss. In addition, Levy warns that Tesla’s inventory of unsold cars, which it somewhat successfully reduced in Q2, is rising again — a trend that may not bode well for profit margins. Globally, the analyst believes Tesla has an inventory of 120,000 to 130,000 unsold cars.

Is Tesla stock a buy?

However, perhaps the worst news for Tesla investors today is that while Barclays sounds bullish on Tesla deliveries, it isn’t. not at all about Tesla’s stock price.

Although Levy maintained an equal weight (ie, hold) on Tesla stock today, the analyst set a price target of just $220 on Tesla stock — down from the $248 the stock is now trading for after today’s forecast . That means if Levy is right, Tesla shares could fall 11% over the next 12 months, even if they beat deliveries.

And probably Levy it is even about Tesla stock falling, for the simple reason that 67 times earnings is too high a price to pay for single-digit sales growth and shrinking profit margins. To me, that means Tesla stock is still a sell.