© Reuters.
Investing.com – Up more than 50% in the past month, Tesla (NASDAQ:) is up about 70% over (+8%) from its yearly lows in late April.
An extraordinary rally which according to some investment banks is not sustainable as it does not take into account the fundamentals. An idea shared by Barclays (LON:) analysts who downgraded Tesla (:TSLA) shares to Equal Weight from Overweight even though the target price was revised to $260 from the previous $220.
The British bank has not yet jumped on the bandwagon, that “the rally is mainly driven by investors’ renewed love for technology stocks, as well as excitement over the recent announcement that Tesla will open its Supercharger network to other brands”.
“While we are not surprised by the rally, we believe it is prudent to stay out of it,” they wrote in a statement.
“To be clear, we see significant long-term opportunity for TSLA, a view that has supported our previous Overweight rating. We continue to see TSLA as the long-term winner among OEMs in the race to an EV world. increase in the two-year period 2024/2025, when TSLA will start producing the Model 2, a low-cost line that will push it towards mass use”, explained by Barclays.
According to the London bank, the market “is ignoring short-term fundamental challenges”: “The relative ignorance of short-term TSLA fundamentals is our main concern and the focus of our downgrade to an EW rating”.
“However, as further inventory build-up is expected, this could increase questions based on discounts and margins,” the analysts concluded.
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