Tesla stock bear surprises with upgrade after $600 billion rout

Tesla stock woes have caught the attention of one noted Wall Street bear on the EV maker.

Citi analyst Itay Michaeli upgraded his rating on Tesla to Neutral from Sell on Wednesday, viewing the company losing more than $600 billion in market cap from November 2021 highs as nearing overdone.

“We believe the year-to-date pullback has balanced out the near-term risk/reward,” Michaeli wrote in a note to clients.

The analyst served up several reasons for the valuation-based upgrade.

“(1) With the multiple contracting to ~30x 2023E EPS, we feel that some of the prior baked-in expectations that we didn’t agree with are out of the stock,” Michaeli explained. “(2) Though our latest model update leads us to reduce [near term] EPS estimates, we still find ourselves slightly above consensus for Q4-2024E EPS. (3) To be sure, macro/competitive concerns are likely to remain an overhang with capacity rising, but as we’ve previously written, in a hard landing scenario Tesla’s long-term competitive…

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This article was written by and originally published on finance.yahoo.com