Tesla: share continues to fall, with DB downgrade

(CercleFinance.com) - Tesla shares posted one of the biggest declines in the S&P 500 index on the New York Stock Exchange on Thursday, as Deutsche Bank expressed concern about the consequences of postponing the launch of the 'Model 2' and the strategic priority now given to the 'Robotaxi' project.


The electric vehicle manufacturer's shares closed down 3.6% (pmt: -1.8%), while the S&P was down just 0.2%.

In a note published in the morning, the broker says that it has decided to downgrade the stock from 'buy' to 'hold', with a target price reduced from $189 to $123.

Our long-term buy recommendation was based on the prospect of the launch of the new-generation vehicle at less than $25,000, initially scheduled for the end of next year, the analyst says.

According to Deutsche Bank, this product would have enabled the company to reaccelerate its sales volumes, margins and cash flow, and even to definitively assert its dominance of the electric vehicle market in Western countries.

The postponement of the Model 2's release will put significant pressure on earnings and cash flow generation from 2026 onwards, according to our estimates, it is worried.

It will also make the company's future highly dependent on the success of its fully autonomous driving (FSD) technology, which represents a technological, regulatory and operational gamble, the broker warns.

The stock has now fallen 40% YTD.


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