(News Bulletin 247) – Jefferies announced on Wednesday that it had downgraded its recommendation on Tesla, reduced from ‘buy’ to ‘hold’ with a price target reduced from 230 to 185 dollars.
In a research note, the analyst justifies its deterioration by the strategy deployed by the manufacturer of electric vehicles, which has decided to favor its growth at the expense of its margins.
“The first quarter results did not validate that the elasticity of demand will offset price declines and cost progress may take time to materialize,” he wrote.
The Californian group’s management team having clearly indicated that it was ready to accept lower profit margins, the intermediary explains that it has reduced its operating profit (Ebit) forecast for 2023 by 32%.
Its annual revenue target is lowered by 7% to 96.6 billion dollars.
“We expect the decline in profitability to weigh on the stock market valuation as long as increases in forecasts do not take place,” concludes Jefferies.
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