Jefferies analyst Philippe Houchois raised his price target for Tesla to $400 from $300 saying the company's risk profile continues to improve. The stock closed Friday Tesla's gross margin levels in Q3 are consistent with sustained profitability and its average selling prices should stabilize ahead of improvements in the second half of 2020, Houchois tells investors in a research note. Stabilization in 2019 "sets a better foundation" for a return to growth in 2020 revenue and earnings, adds the analyst. Houchois, who continues to see Tesla maintaining its edge in product, affordability and technology, keeps a Buy rating on the shares.

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Deutsche Bank analyst Emmanuel Rosner downgraded Tesla to Hold from Buy with a price target of $123, down from $189. The analyst cites the "high likelihood" of Model 2 push-out and the company's change of strategic priority to Robotaxi for the downgrade. Deutsche's Buy rating was predicated on Tesla's next-generation vehicle priced at $25,000 coming late next year, which would allow the company to reaccelerate volume, margins and free cash flow, and potentially come to dominate the Western electric vehicle market, the analyst tells investors in a research note. However, pushing out the Model 2 will create "significant" earnings and free cash flow pressure on 2026 and beyond estimates, and make the future of the company tied to Tesla "cracking the code on full driverless autonomy," which represents a "significant technological, regulatory and operational challenge," says Deutsche Bank. The firm views Tesla's shift to Robotaxi as "thesis-changing," and worries the stock will need to undergo a "potentially painful transition in ownership base," with investors previously focused on electric vehicle volumes and cost advantages potentially "throwing in the towel, and eventually replaced by AI/tech investors with considerably longer time horizon."

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