UBS analysts believe finding a successor to Elon Musk as Tesla CEO will be extremely challenging. The Wall Street Journal reported that Tesla's board initiated a search for a new CEO, although Tesla has denied this. UBS points out Tesla's significant 'key man risk', emphasizing its heavy reliance on Musk's leadership.
Tesla is at a crucial crossroads. While its core business remains car manufacturing, the company's future valuation is heavily tied to its AI endeavors, including autonomous vehicles and humanoid robots. Musk has frequently emphasized the importance of these areas to Tesla's long-term value.
The analysts note that replacing Musk's charismatic leadership and ability to captivate investors will be a daunting task. This uncertainty contributes to UBS's sell rating for Tesla, with a price target of $190 (33% below the closing price on the day of the report).
Tesla's stock price has declined substantially, down 42% from its all-time high in mid-December.
Tesla 's board reportedly opened a search last month for a CEO to replace Elon Musk, raising the question of what the company's future would look like after Musk's long tenure at the helm. Tesla has denied the Wall Street Journal report , but the story highlights how "perhaps no other company has as large a key man risk," UBS analysts led by Joseph Spak told clients in a note Wednesday. Tesla is at a critical juncture right now, Spak wrote. The core business is still focused on cars, but "the bull case narrative is that Tesla is an AI company, with Musk himself indicating in various ways that the value of Tesla is tied to autonomous vehicles and humanoid robots," Spak said. Whether another executive can fill Musk's shoes is uncertain. "Finding a CEO who can captivate the market and investors as much as Musk is a tall task," Spak said. UBS rates Tesla a sell with a $190 price target — 33% below where the stock closed Wednesday. Shares are down 42% from the mid-December all-time high of $488.54. TSLA 3M mountain Tesla over past three months.
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