UBS analyst Patrick Hummel downgraded Tesla to Neutral from Buy with a price target of $270, up from $220. The analyst thinks the recent strong share performance fully reflects the strong demand response seen after Tesla’s price cuts, as well as a solid execution in 2024. The company’s Q2 results validated the pricing strategy with a small decline in auto gross margin despite a decline in average selling price by $900 per car quarter-over-quarter, the analyst tells investors in a research note. Going forward, upside risk to consensus estimates “seems very limited” because Tesla’s strong execution is already fully reflected, says UBS. The firm continues to see Tesla globally leading the race to affordable electric and autonomous mobility, but says that on a one-year view, the stock’s risk/reward looks balanced.
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