Tesla is downgraded at Barclays ahead of Q2 earnings
Joe Raedle
Barclays lowered its rating on Tesla (NASDAQ:TSLA) on Wednesday to Equal Weight from Overweight on the expectation that shares will cool off from their hot run in 2023.
Analyst Dan Levy and team think it is time for investors to take profits on the electric vehicle stock following the AI-driven thematic rally and recent Supercharger buzz, although they conceded that there is risk trying to call the top in the recent rally.
"Our experience covering TSLA has made us well aware of the potential for TSLAâs stock movements to be driven by more than fundamentals... In fact, we have at times been willing to be more generous with our target multiple given the belief that TSLA is far more likely to get the more than a carmaker treatment by the market, with support from different pockets of the investment community, including retail and momentum investors."
However, questions on discounting and margins are seen cropping up with the Q2 and Q3 Tesla (TSLA) earnings reports to potentially pull the plug on the rally.
Looking further ahead, Barclays continues to see Tesla (TSLA) TSLA as the long-term winner amongst OEMs in the race to an electric vehicle world. Excitement is expected to build again in the late 2024-2025 timeframe as TSLA begins to ramp on the Model 2, its low-cost model, which will mark TSLAâs push for mass scale.
Barclays assigned a price target of $260 to Tesla. Shares of Tesla (TSLA) rose 1.33% premarket to $278.09.
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