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Saturday 25 May 2019

Tesla downgraded due to demand fears

Tesla shares dropped 2pc in pre-market trading yesterday. Photo: Niall Carson/PA
Tesla shares dropped 2pc in pre-market trading yesterday. Photo: Niall Carson/PA

Esha Dey

Demand for Tesla's cars is expected to come under more pressure amid increasing competition, the phase out of a US federal tax incentive and an aging product line-up, Evercore ISI analyst Arndt Ellinghorst said on Monday.

Mr Ellinghorst downgraded the shares in the company to the equivalent of a 'sell' rating from 'hold', saying "growth cannot stall for a growth company".

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It's the stock's 15th sell rating among 36 analysts tracked by Bloomberg.

Tesla shares dropped 2pc in pre-market trading yesterday.

"As growth estimates are coming down, valuation multiples should trend lower," the analyst said, adding that investors would possibly look through Tesla's Autonomy investor day to be held later on Monday, until they see more evidence of progress on the business model.

Analysts, on average, expect a loss of 90 cents a share for the quarter, on revenue of $5.27bn, according to data compiled by Bloomberg.

Bloomberg

Irish Independent

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