Shares of Tesla Inc.
TSLA,
took a 5.7% dive in morning Friday, after the electric vehicle maker started discounting some of its U.S. EVs, which prompted Guggenheim to recommend investors sell. The stock, which was currently the 2nd-worst performer in the S&P 500
SPX,
was pulling back after rallying 14.3% in a little over a week, since closing at a 2 1/2-year low of $108.10 on Jan. 3. The EV discounts posted on Tesla’s website late Thursday came a week after the company cut prices in China for the second time in three months. Guggenheim’s Ronald Jewsikow lowered his rating to sell from neutral, and established a price target of $89, which implied about 24% downside from current levels. He said Wall Street estimates are “far too optimistic” ahead of fourth-quarter results, which are due out on Jan. 25, and 2023 estimates also need to be reset amid the “global price cut wave.” Tesla’s stock has plunged 47.4% over the past three months, while the S&P 500 has gained 8.0%.
