Nomura Instinet analyst Romit Shah downgraded Tesla this morning to neutral from buy in a note titled “No Longer Investable.” The note to clients starts by pointing out that previously he’s been one of the biggest bulls on the Street since initiating coverage last October.
Shah slashed his price target on the company from $300 from $400 citing the “erratic behavior of CEO Elon Musk.” Among Shah’s concerns: The increasing number of Musk tweets per day, the cave diver accusation, Musk’s outburst on an earnings call, his taunts of short sellers and his appearance on Joe Rogan’s podcast.
More from Bloomberg.com: Crypto Wipeout Deepens to $640 Billion as Ether Leads Declines
Shah continues to believe that Tesla can out-innovate the competition and that the company may eventually be much bigger than it is today, but says it’s better to remain on the sidelines until the company has better leadership. Tesla shares have lost over 25 percent of their value since early August in the immediate wake of Musk’s "funding secured" tweet. The shares fell 2 percent in pre-market trading on Tuesday.
With the downgrade, bulls on the stock have become the minority with just 9 analysts recommending buy, 11 recommending a hold, and 12 recommending a sell, according to data compiled by Bloomberg.
Updates to add analyst recommendations in the last paragraph.
More from Bloomberg.com
- Goldman Bear-Market Risk Indicator at Highest Since 1969: Chart
- Ford to Trump: That's Not How It Works
- Trump Adviser Says President’s GDP Tweet Had an Extra Zero