Tesla shares will lose more than half of their value, says Citi By Investing.com

Tesla shares will lose more than half of their value, says Citi By Investing.com


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Investing.com – Tesla Inc (NASDAQ:{} ) (BVMF:) has been launching a rally since early July. Since a July 5 low of $648, the stock is up more than 42% for the month to yesterday’s close of $922.19.

However, as has been the case in recent years, Tesla’s valuation is divided. Some believe that its value could explode in the next few years, while others think that there is a high degree of exaggeration about the long-term potential of Elon Musk’s company. In a note to clients, banking analyst Itay Michaeli reiterated his sell advice on Tesla stock with a target price of $424, a downside risk of more than 54% from last night’s closing price.

The negative view of Tesla stems from doubts about Tesla’s self-driving technology and the view that Tesla stock, which has a record 76-day forward earnings valuation, does not factor in the economic downturn.

“We think the current valuation remains challenging considering the few companies that have reached Tesla’s current market cap have done so by generating ~$100 billion in gross profit (on average) versus Tesla’s ~$30 billion annually in the second half of 2022 (and. $20 billion in the first period)”, Michaeli writes. “And in the current macroeconomic situation, we need to remember that Tesla is adding a lot of production capacity to the Model Y at a price that is now (> $ 60,000) where the size of the American market is small and where other EVs are also growing. .

What do other analysts think about Tesla stock?

When it comes to what other analysts think about Tesla stock, data compiled by Investing.com shows that out of 39 professional analysts who follow the stock, 21 posted a positive outlook, 11 are neutral, and only 5 recommend selling.
Also, these analysts’ 12-month average target, which is $910.28, is 1.29% below last night’s closing price.

Only InvestingPro, which integrates several recognized financial models, recommends more caution, coming in at $799.05, more than 13% below yesterday’s closing price.