Tesla Stock (NASDAQ:TSLA)
After Goldman Sachs became the latest Wall Street company to reduce its rating on Tesla (NASDAQ:TSLA), the electric car manufacturer Tesla (NASDAQ:TSLA) traded lower early Monday. Goldman Sachs is the latest investment firm to downgrade Tesla stock, following in the footsteps of Morgan Stanley and Barclays.
According to Goldman Sachs, Tesla stock price now more accurately reflects a favorable long-term outlook on the automaker’s growth potential and competitive posture. Therefore the firm has downgraded its recommendation for the company from Buy to Neutral.
The business believes that the market is now giving the stock greater credit for its longer-term possibilities due to the recent gain, as stated by Analyst Mark Delaney and his team. This was said to be the key reason for the shift. However, the company is also aware of the “difficult pricing environment” for new cars, which it views as a possible impact on Tesla (NASDAQ:TSLA) non-GAAP gross margin for this year. In addition, the company is aware of the “difficult pricing environment” for used vehicles.
Even though Goldman Sachs increased its forecasts to reflect a more moderate pace of price drops coming ahead, it is anticipated that the purchasing activity on the EV stock that was prompted by the firm launching sections of the charging network and the influence of AI on Tesla (NASDAQ:TSLA) full-self-driving product will begin to taper down.
The price objective that Goldman Sachs has set for Tesla (NASDAQ:TSLA) has been reduced from $248 to $185. Despite this, the investment bank has maintained a bullish outlook on some aspects of the electric vehicle business.
“It is important to note that we continue to have a positive outlook on adopting electric vehicles, and we continue to see the most investing opportunities among our broader suppliers, particularly those with higher content to enable the shift to electric vehicles and electrification.”
Following a decline of roughly 3.55% over the previous week, Tesla stock price dropped another 2.20% in premarket trading to $250.95.
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Author Shariq Khan 
