Date
3/8/2023 10:09:38 AM
(MENAFN- Baystreet.ca)
Tesla Down on Downgrade Tesla (NASDAQ:TSLA) Shares fell Wednesday after Tesla was downgraded to hold from buy at Berenberg. The investment firm said there is“less room for disappointment” after a hot start to the year for Tesla's shares.
Berenberg turned cautious on the stock, on its view the recent rally now has the share price reflecting misplaced fears over an electric vehicle price war.
The +70% year-to-date rally in Tesla' share price has pushed Berenberg to the sidelines for now, although the long-term view is still bullish.
“Tactical price changes reflect cost-leadership strategy: Tesla's new plants offer multi-year opportunity in capital and labour efficiency,' noted analyst Adrian Yanoshik
Yanoshik and team still think Tesla can take market share at a gross margin of 25% with credits excluded, but in the near term the price cuts are seen coming at a cost to near-term margins.
Tuesday brought word that Tesla, Inc.'s valuation had zoomed up YTD despite multiple price cuts that we expect to massively reduce the company's margins. Tesla has all but admitted it has a substantial problem with demand that is forcing it to reduce prices.
The company's alternative businesses don't have the scale needed to justify the company's valuation. Overall, we see the company as massively overvalued and a poor investment.
TSLA shares caved $4.39, or 2.3%, to $183.32.
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