👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

Tesla stock dips as UBS cuts rating to Neutral on rich valuation

Published 07/24/2023, 04:54 AM
© Reuters.  Tesla (TSLA) stock dips as UBS cuts rating to Neutral on rich valuation
TSLA
-

UBS analysts downgraded Tesla (NASDAQ:TSLA) shares to Neutral from Buy with the price target of $270 per share (up from the prior $220).

Tesla shares are down 1.7% in pre-market Monday.

The analysts see Tesla shares as fully priced at these levels, reflecting the management’s strong execution. Tesla stock is up over 110% year-to-date.

“We think the recent strong share performance fully reflects the strong demand response seen after the price cuts, as well as a solid execution in 2024,” the analysts said in a client note.

“Going forward, upside risk to consensus seems very limited because strong execution is already fully reflected. Also, (1) deliveries are guided down q/q for Q3 on temporary production halts; (2) opex is on the rise due to Cybertruck, Dojo and other projects; (3) any stepchange in margins will depend predominantly on progress made on the autonomy front, and it would seem overly optimistic to anticipate this for the next 12 months.”

Despite the downgrade call, which is mostly fueled by rich valuation, the analysts continue to see Tesla as a global electric vehicle (EV) leader. Still, risk/reward “looks balanced” over the next 12 months, they said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.