Goldman Sachs downgrades Tesla after its 105% surge in year-todate value

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  Goldman Sachs has downgraded Tesla's stock from "Buy" to "Neutral", after its 105% year-to date rally.
  
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  According to the bank, Tesla's value is high. There are also a few positive and negative factors that will influence its future.
  
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  "Valuation has reached its limit." Goldman stated that Tesla is trading at a higher multiple compared to other fast-growing tech companies.
  

Goldman Sachs said in a note published on Sunday that Tesla's stock price is set to slow down after its 105% year-to date surge.

According to the note, Tesla's stock was downgraded to "Neutral", and its "valuation has been fully accounted for" after its recent rally.

Goldman doesn't think Tesla is a bad investment. The bank cited a number positive catalysts for Tesla's long-term growth, such as its recent opening up of its charging network to other automakers and its potential launch of a cheaper EV, priced at less than $20,000.

Mark Delaney, Goldman Sachs, said: "Overall, we believe that our view that Tesla has a good long-term outlook, given its leadership position in the EV market and clean energy market, is better reflected now in the stock." "Valuation has reached its peak. Tesla is trading at a higher multiple compared to other fast-growing tech companies like Nvidia or AMD.

Delaney stated that he expected Tesla's second quarter vehicle deliveries to be close to the consensus estimates of around 450,000 and that new products such as the Cybertruck and the refreshed Model 3 are tailwinds for Tesla.

Tesla's recent price cuts are expected to continue to negatively impact its profit margins, and this should keep the stock down for the time being.

Delaney added, "We also recognize the challenging pricing environment for new cars that we believe will continue to impact Tesla's automotive non GAAP gross margin in this year."

Delaney's downgrade of Tesla stock is based on his comfort with the margin pressures and Tesla's high valuation. Tesla's stock is currently trading at a price-to earnings ratio of 53x. This is higher than Nvidia, which has a 41x.

Goldman may become more bullish about Tesla stock if it ramps up production of its third-generation vehicle platform. This could include a car that is affordable, or if it makes quicker progress with its fully-autonomous and artificial intelligence products.

Delaney raised his Tesla 12-month target price to $248, up from $185. This represents a potential decline of less than 1 percent from current levels. Tesla's stock dropped nearly 3% during Monday's session.

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By: mfox@businessinsider.com (Matthew Fox)
Title: ‘Valuation is full’: Goldman Sachs downgrades Tesla stock after its 105% year-to-date surge
Sourced From: markets.businessinsider.com/news/stocks/tesla-stock-price-downgrade-goldman-sachs-ev-valuation-concerns-tsla-2023-6
Published Date: Mon, 26 Jun 2023 16:40:14 +0000

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