California-based Tesla (TSLA) has been ordered to pay $137 million in damages to a former Black worker for subjecting him to a racially hostile work environment, a report by the Wall Street Journal stated. The amount includes $130 million in punitive damages and $6.9 million in compensatory damages.
The federal jury that gave the order said the company did not take reasonable steps to prevent Owen Diaz from being racially harassed. Diaz, a contract worker, was employed at Tesla’s Fremont factory in 2015 and 2016 as an elevator operator.
The company said the trial concerned racist graffiti in the bathrooms and racial slurs in the factory. Tesla also said that Diaz had complained thrice about the harassment and it took action. (See Tesla stock chart on TipRanks)
The electric carmaker said, “While we strongly believe that these facts don’t justify the verdict reached by the jury in San Francisco, we do recognize that in 2015 and 2016 we were not perfect.”
On October 4, RBC Capital analyst Joseph Spak maintained a Hold rating on the stock and increased the price target from $745 to $755 (3.3% downside potential).
The analyst said, “The outperformance in third-quarter deliveries was primarily due to the ongoing made-in-China Model 3 and Model Y ramp amid a very difficult supply environment and a sequential rebound in Model S/X deliveries from depressed levels in the second quarter.”
Overall, the stock has a Hold consensus rating based on 12 Buys, 7 Holds and 7 Sells. The average Tesla price target of $690.64 implies 11.5% downside potential. Shares have gained 88.6% over the past year.
According to TipRanks’ Smart Score rating system, Tesla scores a 6 out of 10, suggesting that the stock is likely to perform in line with market averages.
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