Tesla Motors Inc.’s stock slumped 1.8% in premarket trade Wednesday, extending a sharp selloff suffered in the previous session, after Pacific Crest downgraded the electric car maker on concerns over valuation. Analyst Brad Erikson cut his rating to sector weight from overweight. He believes fair value for the stock is $293, which is 9.4% above Tuesday’s closing price. The company is still one of the most innovative stories in the automotive industry, and its “differentiation relative to its peer group is nothing short of total,” Erikson wrote in a note to clients. “We simply believe the stock price now more fully reflects these core attributes.” The shares dropped 4.2% Tuesday, the biggest one-day slide in five months, after Deutsche Bank downgraded it, also on valuation concerns. The stock was still up 20% year to date through Tuesday, compared with the S&P 500’s 1.1% gain.
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