With Tesla shares near all-time highs, Morgan Stanley and Goldman Sachs downgrade Tesla

Tesla stock market

Tesla shares (TSLA) have been on a wild ride over the past year, rising from lows below the $200 mark to an all-time high of $1,027.48 last week.

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But that performance hasn’t been enough to impress analysts from two prominent Wall Street firms, Morgan Stanley and Goldman Sachs.

In a note to investors on Friday, Adam Jonas of Morgan Stanley downgraded Tesla from ‘Equalweight’ to ‘Underweight’. Jonas also revised his price target for the automaker, lowering it from $680 to $650.

Among the reasons cited for the change, Jonas said they center around the capital needs of Tesla, and short-term demand (sound familiar?).

Nearer term, we acknowledge that the company must continue to navigate challenges related to restarting its Fremont facility and confronting light vehicle markets that may not be as strong as pre-COVID levels. In recent weeks, Tesla has announced price cuts in China and the US across its model range that we had not previously incorporated into our forecasts, until now.

Also on Friday, Goldman Sachs downgraded Tesla from a ‘Buy’ rating to a ‘Neutral’ rating. On Goldman Sach’s part, they said they remain overall positive on Tesla in the long-term, but the recent price cuts and production issues with the Model Y could challenge the automaker in the short term.

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Tesla recently cut pricing on several models (which we hadn’t anticipated occurring outside of the China market and consider to be a modest negative).

Tesla shares closed on Friday at $935.28, down 3.86% from the previous day.

Tesla shares June 12 2020

h/t [OilPrice.com]

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Founder and Editor-in-chief of Drive Tesla Canada | Darryn@DriveTeslaCanada.ca Have a Tesla tip? Email tips@driveteslacanada.ca, or DM us on Twitter @DriveTeslaca