Earlier Friday, Morgan Stanley and Goldman Sachs lowered their investment ratings, saying in research reports covered by the media that with stocks close to $ 1,000, it’s just too expensive.
Morgan Stanley downgraded its tech title to an underweight of equal weight and lowered the price target to $ 650 from $ 680. With stocks trading at around $ 940, the Wall Street company expects Tesla stock to fall by more than 30%.
Morgan Stanley analyst Adam Jonas has expressed concern that investors are neglecting risk factors as stocks reach historic highs. The analyst underlined the relations between the United States and China as a big risk for the history of Tesla and therefore its stock.
“We believe that any potential deterioration in relations with China could have a disproportionate impact on Tesla compared to other actions in our coverage,” the analyst wrote in the note, reported TheStreet.com. The analyst has credited Tesla for boosting the EV market, but he does not think the stock should trade so high. After all, automakers, including Ford and General engines (NYSE: GM) also increased their investments in electric vehicles.
Meanwhile, Goldman Sachs, who increased his vision for global vehicle sales this year, downgraded his Tesla rating to buy neutral. This decision was due to Tesla’s actions exceeding its previous price target of $ 925, reported MarketWatch. Goldman raised this target to $ 950 on Friday. The Wall Street company said the price cuts on its 3, S and X models were a negative part of Tesla’s history. Goldman Sachs raised its rating on GM to buy from neutral.