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Wedbush analysts removed Tesla (NASDAQ:TSLA) from the firm’s Best Idea List and cut the price target to $250 per share from $300. The analysts’ near-term view of Tesla stock is “increasingly becoming more challenged” after CEO Elon Musk completed the Twitter takeover.
They said that Tesla investors “have been punched again and again by the Musk Twitter antics,” placing shares in the “deep” penalty box in the next couple of months. The first catalyst that could help Tesla shares to re-rate is Q4 deliveries, which should be presented at the beginning of January.
“Musk has essentially tarnished the Tesla story/stock and is starting to potentially impact the Tesla brand with this ongoing Twitter train wreck disaster,” the analysts said in a client note.
“Tesla is Musk,” they added and reminded the CEO of SpaceX that it was the electric vehicle (EV) maker that made him a billionaire in the first place.
“And now sitting on top of the peak of the mountain with Tesla in a massive position of strength Musk has managed to do what the bears have unsuccessfully tried for years…crush Tesla’s stock by his own doing in what we view as a purely painful dark situation,” the analysts added.
Tesla shares are down about 25% since the Twitter deal was closed and nearly double that since Musk first made a bid to take the social media company private.
The lower price target reflects a lower multiple due to the “Musk overhang that gets worse by the day,” the analysts concluded.
Tesla stock price closed 7.17% lower yesterday, hitting fresh 2-year lows.
