Sell Tesla Stock, Says Analyst. It Can Drop 34%.

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Sell Tesla Stock, Says Analyst. It Can Drop 34%.
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Thursday, HSBC launched coverage of Tesla stock with a Sell rating and $146 price target.

Thursday, according to ratings-aggregation services, HSBC launched coverage of Tesla stock with the equivalent of a Sell rating and $146 price target, down about 34% from recent levels.

The issue appears to be valuation. The analyst believes the electric-vehicle business isn’t worth what Tesla stock trades at today. What’s more, Tesla’s other businesses, including energy storage, self-driving cars, robots, and artificial-intelligence computing, all have regulatory hurdles that mean slower-than-expected growth in the future.

Newsletter Sign-up The report is having some impact on Tesla stock. Shares were down 0.9% in premarket trading at $220.06 a piece while S&P 500 futures were up about 0.2%, and Nasdaq Composite futures were little changed. Overall, about 43% of analysts covering Tesla rate shares at Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.

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