Despite a recent winning streak spanning 13 consecutive days and a $240 billion boost to valuation, Goldman Sachs slapped Tesla with its fourth share downgrade of the month.
Secretary of Transportation Pete Buttigieg said Tuesday there are concerns about how drivers interact with Tesla's Autopilot feature, which he emphasized does not act as a replacement for paying attention behind the wheel.
"Tesla has experienced a robust rally, and it might be hard to deliver on current valuations," he continued. "Tesla could see a 10-20% drop before investors want to pile back in."Goldman Sachs pinned the bulk of the downgrade on valuation, while also highlighting the difficult pricing environment for new EV vehicles.According to analysts, the pricing issue for EVs will hurt Tesla’s non-GAAP gross margin in 2023.
Goldman said it remains positive about EV adoption and identified the bulk of investing opportunities among suppliers with a higher capability of making the shift to EVs and electrification.The analyst’s new price aim for Tesla suggests a 3% downside risk when compared to Friday’s closing price.Direxion’s Ed Egilinsky said despite Tesla’s year-to-date increase, "the 14-day Relative Strength Indicator has been hovering around an overbought level throughout June.
"There is opportunity to take a short-term bearish view for traders believing the stock is currently overbought or if they're looking to hedge against their existing gains in the stock," he said.
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