Citi Downgrades Tesla Motors (TSLA) to Sell; 'SEC Action Raises Risk of a Spiral'
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(Updated - September 28, 2018 7:11 AM EDT)
(updated to add analyst comment)
Citi analyst Itay Michaeli downgraded Tesla Motors (NASDAQ: TSLA) from Neutral to Sell. The price target was cut from $356 to $225.
The analyst sees two potential outcomes:
- CEO Elon Musk exists or
- Musk remains after settling or prevailing on the SEC charges.
The analyst see little reasons to not believe the equity valuation would take a hit should Musk resign. Should that happen, there is increasing risk of a triggering on downward confidence which would create a spiral that TSLA management would want to avoid.
Michaeli says a downward spiral is difficult to quantify in terms of risk and believes that the pull-back after Thursday's close is still not enough as the risk/reward remains negatively skewed.
Shares of Tesla Motors closed at $274.17 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades, Hot Downgrades
Related EntitiesCiti, Tesla
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