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The brokerages, while reiterating that their long-term view on the stock remains positive, noted the current valuation underestimates risks including increased competition in the electric vehicle industry.
Top automakers including General Motors Co (N:GM) and Ford Motor Co (N:F) have doubled down on their investments in the space by offering more electric vehicles, aiming to cash in on a sector that is touted as the most promising alternative to conventional cars.
“We highlight risks to Sino-U.S. trade, near-term demand, capital needs and tech competition as the key bear vectors we think deserve more attention,” Morgan Stanley analyst Adam Jonas said in a note on Friday.
Morgan Stanley cut its rating to “under-weight”, joining 12 other brokerages who recommend selling the stock.
Following Goldman Sachs’ downgrade to “neutral”, Tesla now has 12 analysts with a “hold” rating, and nine brokerages recommending “buy” or higher.
The bar for the automaker’s fundamentals is higher, Goldman analyst Mark Delaney said on Thursday, while increasing the price target to $950 from $925.
Morgan Stanley cut its price target on Tesla’s stock to $650 from $680, in line with the median price target, according to Refinitiv data.
Tesla’s shares, which have jumped a whopping 360% in the last twelve months, were down nearly 1% in premarket trading.
