Analysts at both Morgan Stanley and Barclays have downgraded Tesla shares to "equal weight." Yahoo Finance Automotive Reporter Pras Subramanian explains why.
Video Transcript
SEANA SMITH: Well, investors are unplugging from Tesla with shares sinking lower today, off just over 3%. The EV maker facing two downgrades in just two days this week. One from Morgan Stanley, the analyst there, Adam Jonas, and the other from Barclays. So where does the company really stand? Yahoo Finance's Pras Subramanian joining us now. Pras, we know Tesla obviously a massive favorite here among investors since the start of the year with this huge run up. But a downgrade, particularly from Jonas, that's pretty big.
PRAS SUBRAMANIAN: Yeah. I mean, he's a pretty longtime bull on Tesla. And Dan Levy, day before, also not a bearish analyst on Tesla. Both downgrading-- both basically saying that the stock is not tied to fundamentals right now. You know, not really much news other than some charging deals here and there that are-- that are good but not really needle movers for the stock.
So basically, they're talking about how the Tesla got caught up in AI run up with a lot of AI stocks like Nvidia. But basically, it's-- for Levy, it's a long-dated opportunity. For Jonas, he's saying generative AI and AI for driving are two different things. It's not the same thing. They're not the same companies like Nvidia and others that are rolling up at that. He says we should kind of detach this from reality we got from the AI dream is what he's saying.
But he says-- both analysts say the stock is still, at long term, owning the space. Like, it is a category leader in EV. So just-- you might want to own it but not so much right here. In fact, Jonas says don't rewrite the stock here based on these AI stuff. He raised the high price target because he sees some upside but not enough to keep buying here at these levels.
- That's what I was going to say because the one thing I noticed with his note was that it seemed kind of balanced in playing both sides of the coin, if you will, with regard to Tesla. And certainly, you know, seeing the pullback today, we're seeing that knock-on effect of both of those downgrades. But with regard to it being the front runner in the EV space with both of the analysts. Did we notice that they see Tesla continuing to just hold its position?
PRAS SUBRAMANIAN: They both said that-- in the near term that-- estimates need to come down for Q2. They're both-- they're too high right now. They say that for the near term, there's going to be some sort of a little bit of a dip there. But long term, based on stuff like software, battery technology, the ability to actually outsource software and battery technology to other companies. Jonas noting is that is a big opportunity for them. So there's long-term play. It's still good. But short term, there might be some-- a little bit of hiccups here as sort of the-- the analyst community might be too bullish on their near-term numbers.
SEANA SMITH: And lots of questions just about the pricing strategy that's been laid out here from Tesla are really the price cuts and then raises that we've seen since the start of the year. We also want to bring in Rachelle Akuffo who's joining us from down at DC for the remainder of the hour. Hey, Rachelle.
RACHELLE AKUFFO: Hey, Seana. So yeah, Pras, I wanted to ask you because I mean, when we look at the deal with GM and Ford when it came to Tesla as well, I mean, do you think that these downgrades, do you think they're fairly justified at least in the near term?
PRAS SUBRAMANIAN: I think what's happening is that they need to downgrade the stock because if you're a fund manager and you have an index-- I was talking to Miles about this-- if you own a portfolio of stocks, Tesla keeps going up, up, up, up in terms of price, you kind of got to take a little bit off the table to sort of rebalance your portfolio from like a big institutional ownership point of view.
I think that's what's going on there. It is a downgrade based on the fact that we need to lighten up ownership of the stock because it's getting too high for-- if you were to manage a sort of fund. But for normal investors, more about a watch out here. Yeah, you might see a little bit more pops in the stock going into Q2. We're going to see the delivery numbers come out at the end of the month. So we'll see that. But maybe it's more of a cautionary downgrade right now, not so much that they actually hate the stock right now.
RACHELLE AKUFFO: Fair enough. That's important context there. Pras Subramanian, always good to have you. Thanks so much.
"stock" - Google News
June 23, 2023 at 10:14PM
https://ift.tt/16UKN8f
Tesla stock hit with two downgrades in two days: What analysts are saying - Yahoo Finance
"stock" - Google News
https://ift.tt/cNGF9fk
https://ift.tt/NxiKh0Z
Bagikan Berita Ini
0 Response to "Tesla stock hit with two downgrades in two days: What analysts are saying - Yahoo Finance"
Post a Comment