The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Morgan Stanley cut Tesla Inc. to underweight from equal-weight, saying the rally that saw the stock break above $1,000 this week doesn’t properly reflect emerging risks.
Analyst Adam Jonas cited price cuts across Tesla’s model range in China and the US that suggest auto demand coming out of the coronavirus pandemic isn’t as strong as before. An even greater threat to the Palo Alto, California-based company’s valuation, he said, is a simmering trade row between Washington and Beijing.
“Among the many risks facing Tesla at this time, we would rank risks related to US-China relations at the very top,†Jonas wrote to clients. He warned last month that strained ties between the world’s largest economies could limit gains for Tesla shares, with China seen accounting for almost 30% of the company’s volume this year versus about 13% in 2019.
Jonas is the second analyst to downgrade Tesla after it topped $1,000. Goldman Sachs cut the stock to neutral from buy after the market closed Thursday, with analyst Mark Delaney citing price cuts and production challenges. Still, the stock rose 0.9% to $981.07 at 6:05 a.m. New York time Friday in U.S. pre-market trading.