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Tesla shares have been downgraded again.
Patrick. T Fallon/AFP via Getty Images
Tesla
stock got downgraded again. Wall Street is having trouble justifying some incredible recent gains for the shares.
Morgan Stanley analyst Adam Jonas downgraded
Tesla
(ticker: TSLA) shares on Thursday to Hold from Buy while increasing his price target to $250 a share from $200.
It’s a $50 boost to the target, but Tesla stock has risen almost $80 a share over the past month, jumping from roughly $180 to $260 a share. Deals opening up Tesla’s electric-vehicle charging network to other auto makers, as well as increased AI buzz following
Nvidia’s
(NVDA) blowout quarterly results have boosted shares.
“We see Tesla as an AI beneficiary AND an auto company,” wrote the analyst. “High expectations on the former has brought the stock to a fair value. ”
Jonas said he wasn’t trying to call the end of the Tesla rally and that Tesla is a “must own” EV stock. Still, he didn’t see the incredible rally coming at the start the year
It’s a similar conclusion reached by Barclays analyst Dan Levy. He downgraded Tesla stock to Hold from Buy on Wednesday while raising his price target to $260 a share from $220.
Levy sounded a little more worried about the car business in his report. He projected earnings per share of $4 in 2024. The Wall Street consensus is about $4.80, according to FactSet.
Wall Street just hasn’t been able to keep up with Tesla stock recently. A month ago, the average analyst price target on Tesla stock was about $190 a share, about $10 above where the stock was trading. Now the average price target is about $204 a share, about $55 below where Tesla stock closed Wednesday.
That gap may close some Thursday. Shares have declined 3.3% to about $251 a piec in premarket trading following the downgrade.
S&P 500
and
Nasdaq Composite
futures were down about 0.3% and 0.4%, respectively.
With another downgrade, about 43% of analysts covering the stock rate shares at Buy, down from about 64% at the start of 2023. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.
Among larger U.S. brokers, the highest price target on Wall Street a month ago was $300 a share from New Street Research analyst Pierre Ferragu. Now the highest target is $305 a share from RBC analyst Tom Narayan. Ferragu is still at $300.
Write to Al Root at [email protected]
Source: https://www.barrons.com/articles/tesla-stock-price-downgrade-morgan-stanley-a3bbc772?siteid=yhoof2&yptr=yahoo