Tesla downgraded on valuation concerns

Tesla Motors Inc. was downgraded to hold from buy at Deutsche Bank on Tuesday on valuation concerns. The brokerage remains bullish on the company’s long-term plans to leverage its scale and battery systems in stationary storage, a project the company announced in April, but said Tesla’s shares at this point appear to already reflect the opportunity. “Investors have been relatively optimistic on the market opportunity,” said analyst Rod Lache. Despite the downgrade, Deutsche Bank said in believes stationary storage growth “will be very substantial” a few years down the road, and estimated that it could add around $2.20 to Tesla’s earnings per share. To that tune, the brokerage raised its 2020 EPS estimate to $22.20 from $20 previously. Shares of Tesla fell 1.5% to $275.60 in premarket trade. As of Monday’s close, they had risen 25.7% year-to-date, outperforming the broader S&P 500, up 0.5%.

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