Tesla Gets Downgrade From Long-Term Bull Pierre Ferragu, Analyst Says Time To Book Profits

New Street Research analyst and Tesla Inc TSLA bull Pierre Ferragu is of the opinion that investors who hold the automaker’s stock should book some profits ahead of the S&P inclusion, Barron’s reported Wednesday.

The Tesla Analyst: Ferragu downgraded Tesla from Buy to Hold and maintained the price target of $578 even though he opined the shares are likely to hit $1,200 in 2025.

The Tesla Thesis: “We expect Tesla to trade at 75 [times] forward earnings in 2025, “ wrote Ferragu.

By 2025, Ferragu expects the Elon Musk-led company to be in what he terms hypergrowth. By the following year, he foresees Tesla shipping 2.8 million vehicles a year, which is 500,000 more than what it shipped in 2020. This implies the Palo Alto-based automaker would grow annually at nearly 33%.

Ferragu’s last call to upgrade the stock in October to Buy was made when the stock was trading at nearly $425 and his price target of $578 was the highest at the time.

Tesla’s stock gained 48% since the decision to add the company to the S&P 500 index was made, which is a factor in Ferragu’s current prudential call, noted Barron’s. 

The automaker’s stock has rallied 622.49% on a year-to-date basis and nearly 800% over the year.

Price Action: Tesla shares closed nearly 7% lower at $604.48 on Wednesday and fell 2.23% to $591.02 in the after-hours session.

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