Tesla Skeptic With Downgrader's Remorse Digs In Over Valuation


(Bloomberg) -- An analyst who picked an inopportune time to downgrade Tesla Inc. is expressing regret, giving Elon Musk credit, and yet still doubting the electric-car maker deserves such a rich valuation.

"I wish I hadn't done it," Joe Osha, an analyst at JMP Securities, said of his decision to cut Tesla to the equivalent of a hold from a buy on Oct. 3.

The move looked shrewd at first -- the shares slumped 4.2% that day, after Tesla reported quarterly deliveries that fell short of a number the chief executive officer hyped the week before. But later in October, the billionaire shocked Wall Street with a profit, plus progress toward building a plant in China and bringing out his next electric vehicle, the Model Y. Tesla's stock has more than doubled, closing Tuesday at a record $537.92.

"As an analyst, whenever you end up in this not-very-good situation where you've missed a big move in a stock, there's always a temptation to just give in," Osha told Bloomberg Television. But he's reluctant to recommend the shares now. "I don't think that I'm doing my job if I tell people to buy a stock at 20 times Ebitda," he said.

As of Tuesday's close, Tesla's enterprise value is 27.3 times greater than the earnings before interest, tax, depreciation and amortization that analysts expect the company to average in the next two years, according to data compiled by Bloomberg. General Motors Co. trades at a multiple of 2.6, and Ford Motor Co.'s is 2.3.

Tesla's valuation is rich even relative to technology stocks: Amazon.com Inc. trades at an 18.6 multiple, and Apple Inc.'s is 15.4.

While Osha cautioned against buying Tesla now, he gave Musk props for the company's dominance of the burgeoning market for battery-powered cars, calling the stock "really the only way to play electric vehicles right now." He left CES -- the event formerly known as the Consumer Electronics Show -- last week unimpressed with the offerings that established automakers put on display.

"It's a little shocking, here at the beginning of 2020, that the major auto OEMs in the U.S. and Europe still don't have a product to compete with Tesla," he said, referring to original equipment manufacturers. "Tesla's competitive positioning is awesome."

To contact the reporters on this story: Craig Trudell in New York at ctrudell1@bloomberg.net;Taylor Riggs in New York at triggs2@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Boris Korby

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.


More Related News

Not Even Disney Can Live on Dreams Forever
Not Even Disney Can Live on Dreams Forever

(Bloomberg Opinion) -- The post-Covid-19 "return to normal" that Americans long for is far enough away that not even a company built on dreams can see it.Walt Disney Co. on Tuesday said it will let go of an astonishing 28,000 employees at its U.S. theme parks, which include Walt Disney World and Disneyland, as the coronavirus continues to prevent those businesses from fully reopening. Disney's California locations remain closed because of state restrictions, while the Florida parks have been operating with limited capacity and weaker attendance than Disney anticipated. It's clear that for families weighing the risks of travel and crowds over the reward of getting out of the house, the...

Shares of LG Chem rise after report of Tesla
Shares of LG Chem rise after report of Tesla's interest in battery unit

Shares of LG Chem Ltd, which supplies batteries to Tesla Inc, climbed on Tuesday, after media said the U.S. electric vehicle maker was looking to acquire a stake in a battery unit the South Korean company wants to dispose of. "Tesla is said to be exploring taking up to a 10 percent stake in LG Energy Solution," the Korea Times quoted an unidentified banking source as saying, in the U.S. firm's quest for a stable supply of batteries. Tesla delivered 367,500 vehicles last year.

Trump's Taxes Show He's a National Security Threat
  • World
  • 2020-09-28 09:37:24Z

(Bloomberg Opinion) -- In a tour de force of hard won reporting, the New York Times has put numerical clothing on what we've known about President Donald Trump for decades - that, at best, he's a haphazard businessman, human billboard and serial bankruptcy artist who gorges on debt he may have a hard time repaying.The Times, in a news story published Sunday evening that disclosed years of the president's tax returns, also put a lot of clothing on things we didn't know. Trump paid just $750 in federal income taxes in 2016, the year he was elected president, and the same amount the following year, when he entered the White House. In many years recently he hasn't paid anything at all. He has...

Tesla Battery Day Analysis by Manganese X Energy Experts - Elon Musk Battery Day Review for Tesla Enthusiast
Tesla Battery Day Analysis by Manganese X Energy Experts - Elon Musk Battery Day Review for Tesla Enthusiast

Elon Musk, electric car maker, revealed his vision, but kept his secret under the hood! Martin Kepman Elon Musk Battery Day Elon Musk, electric car maker, revealed his vision, but kept his secret under the hood! Will Manganese X Energy be a "Miner for ELECTRIC GOLD?" Read this article by the Battery Hill experts from NB, Canada. "In virtue of all these above mentioned developments, Manganese X Energy is a good choice for Tesla and other electric car manufacturers." Martin Kepman CEO.Toronto, CA, Sept. 28, 2020 (GLOBE NEWSWIRE) -- September 22, 2020, for Tesla Battery Day. The electric car maker Elon Musk revealed his vision but kept his secret under the hood.  Will Manganese X Energy be...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Economy