Exane Downgrades Tesla To Sell With $340 Target On Growing Competition

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Exane BNP Paribas analyst Stuart Pearson downgraded Tesla (TSLA) to Underperform from Neutral with a price target of $340, down from $385.

The stock in premarket trading is down $6.22 to $723.55.

Tesla no longer has the benefit of operating in a "vacuum of competition," Pearson tells investors in a research note. With possible competition from Waymo, Didi, Baidu (BIDU), and even Apple (AAPL), "we would not want to hold this stock the day the tech titans layout their BEV/robotaxi plans," says Pearson.

The analyst points out that Tesla's 20M long-term volume target will require it to nearly triple its market share in the electric vehicle market while facing a host of new competition. If Tesla succeeds, the "rewards could be great," but the risk that it sacrifices price for volume, or that its battery technology fails or is superseded by solid-state batteries, is real, cautions Pearson.