Oppenheimer Cuts Tesla Price Target, Musk Has ‘Seriously Damaged’ Stock Sentiment By Investing.com

Oppenheimer analysts downgraded Tesla (NASDAQ: NASDAQ:) stock from “Outperform” to “Perform” due to growing risks stemming from CEO Elon Musk’s takeover of Twitter (NYSE:).

They said Musk’s acquisition and subsequent management of Twitter had “severely damaged” sentiment around Tesla stock. As a result, “any short-term positive fundamental news will likely lead to selective hedging of short positions, followed by subsequent re-shorting.”

“We continue to anticipate that TSLA’s technology position will be both tested and validated during 2023, which may be offset by negative publicity resulting in additional willingness,” they said in a downgrade note.

The downgrade decision comes the same day Musk indicated he could step down as CEO of Twitter. The billionaire conducted a poll, asking his followers if he should leave the head of Twitter. He then admitted that he was struggling to find someone to replace him and “keep Twitter alive”.

“We believe Mr. Musk is increasingly isolated as the financial steward of Twitter with his user management on the platform. We see the potential for a negative signaling loop from advertiser and user departures. of Twitter due to inconsistent standards, resulting in accumulating funding needs that may lead to additional TSLA sales just as Tesla’s competitive environment intensifies,” the analysts added.

They insist that their position on Tesla’s technology position remains intact. Analysts continue to believe the electric vehicle (EV) maker is “leveraging unparalleled expertise in EV-related materials and AI, coupled with a multi-year data advantage in materials performance and autonomous driving, to deliver significant cost and performance benefits in the transportation space.”

As of 6:30 a.m. EST (11:30 GMT), Tesla stock is up 4.6% following the announcement of Musk’s departure as CEO of Twitter.

By Senad Karaahmetovic

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