Don’t discount Tesla.
That was the message Friday from two traders as shares of the electric auto maker fell following analyst downgrades from Morgan Stanley and Goldman Sachs.
Morgan Stanley, the more bearish of the two, downgraded Tesla to underweight from equal weight, saying that risks tied to its China business were not priced into the stock. Goldman Sachs analysts were more moderate, downgrading the soaring stock to neutral because of its high valuation.
Tesla shares were down more than 2% in Monday’s premarket after falling on Friday by nearly 4% to $935.28.
“The downgrades … looked logical if you’re looking at valuation and relative valuation, but this stock doesn’t trade on valuation. It trades on sentiment and enthusiasm,” Nancy Tengler, chief investment officer of Laffer Tengler Investments, told CNBC’s “Trading Nation” on Friday.