On June 22nd, Tesla’s stock price fell by 5.5%, marking the largest single-day drop in two months. It closed at $259.46 and lost $47.5 billion in market value in one day.
Over the past month, Tesla’s stock price has risen by about $93, a 52% increase, resulting in the company’s market value increasing by nearly $300 billion.
Barclays analyst Dan Levy downgraded Tesla’s stock rating from Buy to Hold in a report to investors on Wednesday, while also lowering the target price from $260 per share to $220 per share. He believes that the recent rise in Tesla’s stock price has overlooked short-term issues with the company’s fundamentals.
“We believe recent gains may be driven by Artificial Intelligence as well as the push for Tesla’s Supercharger network to be opened to other brands,” Levy said in the report. “However, we believe the wisest course of action is to wait and see.”
Levy is more focused on Tesla’s existing car business instead of AI opportunities. He also believes that Model 3 inventory seems to be excessive and that increasing Model Y production at the Giga factories in Texas and Berlin may require further price cuts, which could hurt profit margins.
Despite this, Levy remains optimistic about Tesla’s long-term prospects. “We still view Tesla as the long-term winner in the transition from traditional automakers to electric vehicles,” Levy said, “but recent fundamentals must be considered.”
