Tesla Inc. shares TSLA, -2.18% are off 1.7% in premarket trading after Jefferies analyst Philippe Houchois downgraded the stock to hold from buy while raising his price target to $650 from $500. “We don’t believe in Tesla domination given the industry’s structure and politics, but the multiple challenges to the industry business model (EVs, batteries, software, autonomy, design-to-manufacture and direct selling) ensure a durable competitive edge, with a ‘messianic. brand reaching far beyond autos,” he wrote, including into areas like battery supply, grid storage, and autonomous driving. Houchois argued that the auto industry’s size is one other factor that could hold Tesla back from “domination.” The downgrade comes after Tesla announced a $5 billion at-the-market offering Tuesday morning and then subsequently disclosed that it completed this stock sale in only a day. Tesla is slated to join the S&P 500 index SPX, -0.44% on Dec. 18 and it will begin trading Dec. 21. Tesla shares have surged 650% so far this year as the S&P 500 SPX, -0.44% has risen 14%.
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