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5 big analyst cuts: Tesla stock slumps on Berenberg downgrade | Pro Recap

By Davit Kirakosyan -- Here is your daily Pro Recap of the analysts’ biggest negative rating moves you may have missed on InvestingPro. Start your free 7-day trial to get this news first.

Tesla shares down on Berenberg downgrade

Tesla (NASDAQ:TSLA) shares fell 3% yesterday after Berenberg downgraded the company to Hold from Buy with a price target of $210.00 (from $200.00) as it believes the upside is limited following the year-to-date outperformance.

The analyst sees the recent price cuts as an investment in growth. Tesla is increasingly focused on volumes, which will mean near-term margins are sacrificed. “This positions them competitively against new electric vehicle (EV) launches as the Berlin and Austin plants ramp up, replicating elements of Shanghai’s low-cost processes,” said the firm.


Long-term, Berenberg remains bullish on the company and highlights the “significant” opportunity in the smaller vehicle segment.

Etsy downgraded at Jefferies, shares fall

Etsy (NASDAQ:ETSY) shares fell more than 6% premarket today after Jefferies downgraded the company to Underperform from Buy and cut its price target to $85.00 from $150.00 as it believes the company's 70% valuation premium to Internet appears unsustainable given below average EBITDA growth and risk of downside to consensus.

"Buyers are churning faster and spending less on ETSY, forcing marketing higher and putting pressure on EBITDA. With more limited take rate upside and deteriorating buyer trends, we see downside to consensus from slowing top line and moderating margin expansion," said the firm.

3 more negative rating moves

Wells Fargo downgraded Edwards Lifesciences (NYSE:EW) to Equal Weight from Overweight and cut its price target to $78.00 from $97.00, based on lower tricuspid sales, the limited upside to TAVR market growth, TAVR share loss, and the slow ramp of Pascal.

On TAVR market growth, the firm said it sees limited upside with EW growing below market due to increasing competition.

Shares closed 2% lower yesterday.

Deutsche Bank downgraded Centene (NYSE:CNC) to Hold from Buy and cut its price target to $79.00 from $94.00 as it is increasingly concerned that the risk of redeterminations and the risks to Medicare Advantage membership/profits are not fully reflected in the share price or consensus estimates.

“Even as the shares are down sharply YTD, we foresee a significant negative future revision both to guidance and Street estimates in the future that creates a risk for the shares,” said the firm.

Bernstein initiated coverage on Sabre (NASDAQ:SABR) with an Underperform rating and a price target of $4.00.

The Global Distribution System (GDS), remains the company’s primary revenue source, comprising 70% of its revenue. However, Bernstein noted that increased competition and technological changes are expected to result in a dilution of market share and margins for incumbent GDSs. Although Sabre's Air IT and Hospitality businesses (20% and 10% of revenue respectively) are smaller, they “are better,” according to the brokerage.

“Debt is too high, with interest costs exceeding EBITDA in 2023, and will continue to constrain the company's ability to invest in development - worsening the competitive gap to larger peer Amadeus,” added the firm.

Shares fell more than 3% yesterday.

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