Tesla (NASDAQ:TSLA) stock is in the news Wednesday as investors react to the electric vehicle (EV) company’s shares getting a downgrade.
Berenberg analyst Adrian Yanoshik is behind today’s news, dropping shares of TSLA stock from a “buy” rating to a “hold” rating. For the record, this rating now matches the analyst consensus based on 37 opinions.
Despite the downgrade, the Berenberg analyst did increase his price target for TSLA stock, however. This new price target is $210 per share, as compared to the prior price target of $200. That represents a potential 12% upside from yesterday’s close. For comparison, the analyst consensus price target for shares is $221.39.
Why the Downgrade for TSLA Stock?
Yanoshik said the following in a note to clients obtained by CNBC:
“Tactical price changes reflect cost-leadership strategy: Tesla’s new plants offer multi-year opportunity in capital and labour efficiency […] However, we downgrade our rating to Hold now that our Buy thesis – based on misplaced fears of a price war – appears to have been accepted by the market.”
As far as trading goes on Wednesday, some 42 million shares have changed hands. That’s still a ways off from its daily average trading volume of about 181 million shares. It also comes as TSLA stock falls 3.5% on Wednesday morning.
Investors seeking out more of the latest stock market news will want to stick around!
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.