Tesla's shares dropped nearly 5% on Thursday, closing at $209.98 after HSBC launched coverage of the electric car company with a "reduce" rating and a target price of $146 each. Despite HSBC acknowledging CEO Musk's allure as a "charismatic CEO with a cult-like following" who fuels the innovator narrative, the analysts questioned whether Tesla's stock is worth its current price until some of its envisioned ambitions, such as selling humanoid robots and autonomous vehicles, become reality. Adding to Tesla's woes, it is also dealing with a widening strike in Sweden and is experiencing labor pressure, though not yet strikes, in the U.S.
Tesla's shares dropped 5% on Thursday to $209.98 following coverage from HSBC Global, who gave the company a "reduce" rating and a $146 price target. HSBC analysts pointed to Elon Musk as both a benefit and a risk to Tesla, citing his "charismatic" personality and "cult-like following". They noted that there is already "hope" baked into the stock's price concerning Tesla's ambitious tech projects, such as autonomous driving and humanoid robots. HSBC warned, however, that delays or difficulties associated with these projects "pose a significant risk" for Tesla, but also mentioned that their core automotive business has advantages over its competitors and therefore "deserves a premium". Additionally, the analysts suggested a successful commercial launch of these projects could lead to a share price re-rating.
Besides the "reduce" rating from HSBC, Tesla is facing a labor strike in Sweden over a refusal to sign a collective agreement, as well as potential labor influence in Norway. Furthermore, U.S. President Joe Biden has also backed unions against Tesla, Toyota, and other auto companies while speaking to UAW workers in Illinois.
Finally, Tesla is set to host a Cybertruck event at the end of November, yet details regarding its specs and pricing have yet to be announced. The vehicle's design and build quality has been criticized by many, The Autopian reported.
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