2 months ago • 1:35 min
Analysts at Citigroup and Morgan Stanley decided on Wednesday that Tesla’s shares are a decent deal all of a sudden.
What does this mean?
Investment banks don’t just deal in assets and cash: they also deal in recommendations. See, one of the services these institutions provide pro clients is expert advice on the “fair value” of shares. And to work that out, they get their in-house eggheads to do some deep-dive research, crunch the numbers, and settle on a value that they can compare with the firm’s actual share price. Then they advise clients to buy, sell, or hold the company’s shares depending on the gap between the two. Now Tesla’s slipping share price has prompted Citigroup and Morgan Stanley to change their minds: Citi thinks the stock’s a hold, and Morgan Stanley, a