Tesla stock lower as UBS says ‘animal spirits’ rather than fundamentals driving monster rally
Tesla stock (TSLA) is down Monday following a strong recent run-up as one Wall Street bank says “animal spirits” have pushed the stock beyond any “fundamental change” at the company.
Joseph Spak at UBS noted that Tesla stock has surged around 40% since the election, adding over $350 million to its market cap. While some of President-elect Donald Trump’s policy proposals could favor Tesla, there are some policy negatives as well that would hurt fundamentals more than where the theoretical upside has taken the stock.
“The rise in Tesla stock is mostly driven by animal spirits/momentum (which has happened multiple times in TSLA’s history),” Spak wrote.
Tesla stock is down around 1% in midday trade, coming after Spak and UBS reiterated a rare Sell rating with a price target hike, to $226 from $197, for Tesla. Investors took Tesla stock to multiyear highs following Trump’s election win, mainly on the back of CEO Elon Musk’s full-throated endorsement of Trump. In return, Trump has unofficially placed Musk in his inner circle, allowed him to sit in on policy meetings, and named him to run a government efficiency council.
