Barclays downgraded Tesla from a buy to a hold rating, marking the worst day in months for booming electric vehicle stocks.
Highlights
- In a note to clients Wednesday, Barclays analyst Dan Levy advised Tesla investors to “stay away,” saying the stock’s 170% rally in the past six months was too much. important to his taste.
- Mr. Levy went on to say that Tesla’s nearly $300 billion (€273 billion) market capitalization increase over the past month was due to higher valuations, rather than a fundamental change in profit expectations.
- Shares of the Elon Musk-led Mercurian company fell more than 5% to $259 (236 euros) in Wednesday trading, marking its biggest daily loss since April 20, although it was still close to its highest price since last fall.
- Tesla stock has benefited from a series of headwinds, including potential new revenue streams thanks to widespread adoption of the auto-charger and widespread optimism about what the AI boom can do.
- Levy added that Tesla’s “short-term fundamentals have held steady at best through the rally” in the share price, and set a price target of $260 per share, which would imply a decline. Long term work.
- As for earnings, Tesla’s valuation is much higher than it was for most of last year, though much lower than when it was trading above $400 (365 euros) in 2021: the expected share price-to-earnings ratio is almost Three times higher than it was at the beginning of this year, although it is less than half of what it was a year ago.
The main criticism
Dan Ives, an analyst at Wedbush, believes Tesla’s rise in valuation is justified. He wrote to clients last week that Wall Street is “finally interested in evaluating Tesla’s sum of the parts,” considering its charging, autonomous driving and solar businesses.
to monitor
Tesla is expected to report its results on July 19. Consensus estimates are for the company to deliver a record number of vehicles this quarter, but profits will fall to the lowest level since the same period last year, according to FactSet.
Forbes rating
Elon Musk has regained his title as the richest man in the world thanks to the recent rise of Tesla. The 51-year-old has a net worth of $237 billion (€216 billion), according to Forbes, about $85 billion (€77 billion) more than the second-richest American, Larry Ellison. Musk lost nearly $5 billion (4.5 billion euros) on Wednesday.
Translated article from the American magazine Forbes – Author: Derek Saul
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