Shares of Tesla Inc. fell in premarket trading on Monday after Goldman Sachs became the latest to warn clients that it may be time to take some profits.
“We’re downgrading shares to neutral from buy, as we believe the stock now better reflects our positive long-term view of the company’s growth positioning,” said the bank’s analysts in a note to clients dated Sunday. Tesla shares TSLA, -6.06% fell 2.3% ahead of Wall Street’s open.
“While the primary reason for the change is that we think the market is now giving the stock more credit for its longer-term opportunities post the recent rally, we’re also cognizant of the difficult environment for new vehicles that we think will continue to weigh on Tesla’s automotive non-GAAP gross margin this year,” said a team led by analyst Mark Delaney. Their price target was increased, to $248 from $185.
After cutting car prices earlier this year, Tesla has been trying to tweak them higher where possible.
Tesla stock has come roaring back in 2023, up 108% as investors have flocked back to technology stocks and especially those seen as artificial intelligence plays, such as the automaker. Deals that allow rivals such as Ford F, +0.64% to use Tesla’s charging network have also been seen as a boost for shares, though some have questioned whether Tesla in the long run will sacrifice its position that way.
The gains for Tesla this year follow a tech rout in 2022, which left the electric-car maker 65% lower.
Shares of Tesla TSLA, -6.06% got hit by other downgrades last week. Morgan Stanley’s bullish analyst Adam Jones cut the shares to the equivalent of hold from buy, though increasing his price target to $250 from $200 per share, as he opined that Tesla will keep cutting its auto prices as competition stiffens.
That followed a downgrade from Barclays analysts who warned against a “too sharp” rally for the stock, in a similar move to Morgan Stanley. Rounding out the week, DZ Bank reportedly hit Tesla on Friday with a rare double downgrade, from buy to sell.