(Bloomberg) — Tesla Inc.’s stock surge (TSLA) post-election has more to do with market exuberance than actual improvement in the fundamentals of its business, UBS Group AG analysts warned in a report.
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Although policy proposals that could benefit Tesla have emerged since President-elect Donald Trump’s victory, analysts led by Joseph Spak wrote that the changes would not have an absolute positive impact on the company.
For example, eliminating consumer tax breaks for purchasing electric vehicles could force Tesla to lower prices, Spak wrote. He also noted that while the regulatory environment under Trump may be more favorable for artificial intelligence ventures, including autonomous vehicles, Tesla does not have a robotaxi ready to take advantage of relaxed regulations.
“The rise in Tesla shares is mainly driven by animal spirits/momentum,” Spak wrote in the report. He maintained a sell rating on the stock, while raising his price target from $197 to $226.
Tesla shares closed last week at $352.56, having added more than $350 billion in market capitalization since Election Day. Shares rose as much as 2.6% before the start of regular trading Monday.
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