Tesla: back under 500-dollar mark after broker downgrade

(CercleFinance.com) - Tesla shares fell below the 500-dollar mark on Thursday after Morgan Stanley downgraded its rating on the Californian electric automaker from "equal weight" to "underweight".


At about 520 dollars per share, the broker sees the group's valuation as "demanding." The risk-reward is unfavorable, it adds, as the 30% downside to its base case is not sufficient to maintain a neutral rating.

Finally, risks to the long-term Chinese business may not be fully appreciated by the market, it writes in a report.

Still, Morgan Stanley has raised its expectations for the carmaker's core auto business, resulting in a net material increase of its target price to 360 dollars from 250 dollars previously.

Tesla shares were down 3.7% at 499.5 dollars in morning trading after these comments. They have nevertheless risen by over 92% in the past three months.

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