Tesla (TSLA) drops 4% after Bernstein's downgrade, but immediately rises again

One of the few titles that has performed very well in the coronavirus period has been that of Tesla Inc (NASDAQ: TSLA), but the rally of this title seems to be running out of fuel in the last few days.

It is difficult to say for sure the reason for this dynamic, but several factors can be identified. On Tuesday, TSLA shares were downgraded by Bernstein analyst Toni Sacconaghi, who predicted "underperformance" compared to "market performance", maintaining a price target of $ 900.

"Despite our relatively bullish stance on the evolution of electric vehicles and the structural benefits that we believe Tesla may have, we find it difficult to justify Tesla's current assessment even in our most bullish / imaginative scenarios," wrote Toni Sacconaghi.

Tesla (TSLA) Stock Price

Le Tesla shares they have risen 31,87% in the past month, making the 7,27% drop similar to a normal bullish retracement. Yesterday, the Tesla stock fell 4,10% to end the day at $ 1476,49. At the time of reporting, the Tesla share price (TSLA) rose 1,55% to $ 1.499,42.

Incidentally, the performance of TSLA shares on Tuesday was a unique case within its category. According to MarketWatch metrics, Ford Motor Company (NYSE: F) increased 1,15% to $ 7,01, General Motors Company (NYSE: GM) increased 2,45% to $ 26,33 and Nio Inc (NYSE: NIO) increased 4,96% to $ 12,27.

According to Sacconaghi, Tesla's current assessment is staggering. "Tesla now looks even expensive compared to growing large-cap technology," he said. The analyst added that Tesla lacks the characteristics to support outperformance, as can be seen from the past few days.

However, he said: "To be clear, we are not asking investors to short-circuit Tesla shares, which - given the recent price momentum - would probably be equivalent to recommending investors to stand in front of a moving freight train."

He went on to tell his investors that, “simply by noting that over a 12-month time horizon (and even more, a multi-year time horizon), it has become increasingly difficult for us to imagine how Tesla's shares can continue to outperform the S&P500. , reflecting our broader skepticism about the sustainability of growth outperformance in the technology sector with the current widening of valuation spreads occurring once every ten years.

New inputs for the TSLA rally

Under the leadership of Elon Musk, the company has seen tremendous growth in a short time. The company is continuing to find strategies to keep its revenues high despite the challenges of the coronavirus. Through its official Twitter page, Musk has announced that the company will supply batteries to other car manufacturers.

“Tesla is open to software licenses and the supply of thrusters and batteries. We are just trying to accelerate [the advance of] sustainable energy, not to crush competitors! " Musk said. This and other positive factors are likely to keep the Tesla rally at the top in the near future.