RBC downgrades Tesla, says profits may have peaked

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Tesla has warned it faces a difficult road ahead.Emmanuel Dunand/AFP

Tesla Inc.’s current valuation already considers overly lofty expectations, with at least one-third of the share price reflecting an “Elon premium,” RBC Capital Markets analyst Joseph Spak wrote in a note to clients.

Spak downgraded Tesla to underperform from sector perform, saying the challenges of the scaling up and delivering a large volume of cars at high prices and margins are coming to a head. The analyst also lowered his price target on the stock to US$245 from US$290.

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