Is it finally time to apply the brakes on Tesla stock?
There is some belief on Wall Street that CEO Elon Musk’s big plans don’t mean bigger profits. The downgrade from Exane BNP Paribas analyst Stuart Pearson is the latest signal.
Pearson, who already had the stock targeted at $385, lowered the prediction to $340, a significant step back considering Tesla stock was trading at $772 midday on Wednesday, holding a market value of between $700 billion to $800 billion.
“Never before have the hopes and dreams of entire industries been so concentrated into one stock,” wrote Pearson in a research report appearing in a Barron’s story. “Tesla’s strategy is to bet the farm that it can nearly triple its (battery electric) market share while fending off the tech-titans in the race to autonomy. Neither are credible in our view.”
Via the Barron’s story, Pearson rated Tesla shares as a “buy” until early last year, but had since downgraded the shares as a “hold.” His report essentially calls Tesla a “sell” this week.
Among the tech titans referenced is likely Apple, which may be targeting a 2024 launch for an all-electric car.
The Tesla skeptics are in the minority, however, with analyst Jim Cramer saying, Tesla is a good bet for the future.
“I do believe every time Elon opens a new market like he is about to do with his factory in Berlin, the stock would go up again,” Cramer said in an interview with TheStreet.com. “It’s really a question of do you believe in the idea of generations. My thinking is if you don’t have any you could still buy some (Tesla shares). … the roadmap is clear and President Biden would do anything to make EVs the central form of public transport.”