4 big analyst cuts: Tesla trimmed yet again for rich valuation

Here is your Pro Recap of the biggest analyst cuts you may have missed today: downgrades at Tesla, Twilio, ON Semiconductor, and Equifax.

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Tesla downgraded to Neutral at UBS

Tesla (NASDAQ:TSLA) shares fell more than 1% pre-market today after UBS downgraded the company to Neutral from Buy with a price target of $270.00 (from $220.00). This is followed by the company’s reported Q2 beat last week.

"We think the recent strong share performance fully reflects the strong demand response seen after the price cuts, as well as a solid execution in 2024."

Looking ahead, the firm sees limited upside potential compared to Street expectations as the company's strong execution has already been fully accounted for.

Additionally, three factors contribute to this view. First, Tesla's Q3 deliveries are projected to decrease due to temporary production halts. Second, operating expenses are rising because of projects like Cybertruck and Dojo. Lastly, any significant improvement in profit margins will largely hinge on advancements in the autonomy front, which seems overly optimistic to expect within the next 12 months.

UBS joins several other analysts trimming the EV maker over the past month after its recent mega rally.

Shares were off 1.4% in premarket trading to $260.02. Year to date, the stock has surged some 140%.

Twilio slashed to Underperform

Twilio (NYSE:TWLO) shares dropped nearly 3% pre-market today after RBC Capital downgraded the company to Underperform from Sector Perform and cut its price target to $50.00 from $55.00, as reported in real time on InvestingPro.

According to the firm, they are moving to the sidelines given concerns about increasing SMS commoditization, mixed execution, margin profile, and a misunderstood GenAI story.

2 more downgrades

Rosenblatt downgraded ON Semiconductor (NASDAQ:ON) to Neutral from Buy with a price target of $95.00 given slowing Automotive demand. Shares are down more than 1% pre-market today.

Equifax (NYSE:EFX) shares fell more than 1% pre-market today after BofA Securities downgraded the company to Underperform from Neutral and cut its price target to $195.00 from $255.00.

Last week, the company reported a Q2 EPS beat but cut its full-year guidance on weak mortgage activity.

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