History Shows Tesla (TSLA) is Unlikely to Outperform Over the Next 6 Months - Bernstein
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Bernstein analyst Toni Sacconaghi reiterated a Market Perform rating and $325.00 price target on Tesla (NASDAQ: TSLA) after shares appreciated 100% in the last 6 months and 190% since June. History shows that there are 3 cases of this ever happening in autos – Ford and Daimler in the aftermath of the Great Financial Crisis and Fiat Chrysler in 2017.
The analyst notes that after a period of dramatic financial outperformance, the outcome is mixed stating "on average, large caps that doubled in the last 6 months subsequently saw a forward 6-month absolute return of just 2.6%, albeit with a very wide standard deviation of 29%". Regarding the stock he went on to say "we continue to believe near-term risk / reward is skewed to the downside for Tesla. We acknowledge it is difficult to call the top on a rocket ship – as our analysis has shown, just because a stock has gone up doesn't necessarily mean it goes back down – but we note expectations for TSLA appear to be rising materially, while we remain cautious on the Shanghai Gigafactory ramp dragging down margins in Q4 and Q1, seasonal softness affecting Q1 demand following subsidy eliminations in the U.S. and the Netherlands, and the potential for Model 3 cannibalization as Model Y ramps".
Shares of Tesla closed at $508.50 yesterday.
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Related EntitiesChrysler LLC, Sanford C. Bernstein, Tesla, Toni Sacconaghi, Model 3
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