Deutsche Bank analyst Emmanuel Rosner is defending his decision to downgrade Tesla as the company potentially shifts away from building its low-cost vehicle — noting major changes to the stock’s investment case. “Earnings are under pressure, free cash flow is under pressure,” he told CNBC’s ” Squawk on the Street ” on Thursday. “There’s no turning point to this, and this is thesis-changing. This is why we’re downgrading the stock.” Rosner’s comments come after the longtime Tesla bull lowered his rating on the stock to hold from buy, as the electric-vehicle giant plans to potentially move away from building its low-cost Model 2 vehicle in place of a self-driving robotaxi. The stock fell 3% on the back of the downgrade, contributing to its 39% year-to-date loss. Rosner viewed the Model 2 as a potential solution to Tesla’s aging lineup, recent price cuts and “structural” issues that have been riddling the company as of late. “We believe that this creates much, much downside to earnings and free cash flow estimates for the foreseeable future,” he said.
Source link: https://www.cnbc.com/2024/04/18/analyst-whose-downgrade-is-hitting-tesla-says-the-investing-case-has-structurally-changed-sees-earnings-downside.html