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Tesla’s valuation is looking more reasonable, but stock still isn’t a buy, Bernstein says


Bernstein is maintaining its bearish stance on Tesla even though the electric vehicle company’s valuation looks more reasonable given the recent pullback. Analyst Toni Sacconaghi acknowledged that Tesla’s valuation looks attractive when compared to some high-growth tech stocks on certain metrics and trades at a lower multiple than Ferrari. He also highlighted the stock’s 41% underperformance since the beginning of October and 48% pullback this year as a reason to reevaluate the stock. That said, Sacconaghi views ongoing risks to revisions, especially if the broader macro environment continues to weaken. “Given TSLA’s pullback YTD, we see current risk/reward on the stock as more balanced, though still modestly negative, given Tesla’s elevated absolute valuation, and the increasing risk of downward revisions amid potential demand challenges,” he wrote. “We also worry about the potential for broader market pressure amid higher rates and slower consumer spending, which would likely impact higher valuation stocks such as TSLA disproportionately.” The longtime Tesla bear maintained his $150 price target on the stock, saying that the company’s increased cost of equity and changes to its discounted cash flow model point to a fair value of $120. The price target suggests shares are due to fall another 19% from Monday’s close. — CNBC’s Michael Bloom contributed reporting

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