Tesla's corporate governance problems could undermine the automaker's competitive advantage by hindering its ability to invest long term and pursue breakout technologies, according to Daiwa Capital Markets.
Analyst Jairam Nathan downgraded Tesla to neutral from outperform and slashed his price target for the automaker by about 20% to $195, which still implies nearly 8% upside from Monday's close of $181.06.
The Wall Street Journal reported Saturday that Musk had used illegal drugs with some board members.
"For instance, any Board reshuffle could slow decision-making and shorten investment time horizons," Nathan wrote.
Daiwa is maintaining its earnings forecast of $3.10 per share for 2024 and $4.25 per share for 2025 based on 13% to 16% delivery volume growth.
Persons:
Jairam Nathan, Tesla, Nathan, Elon Musk's
Organizations:
Daiwa, Markets, Street
Locations:
Delaware