Leaning into the bear narrative on Tesla (TSLA).
UBS analyst Joseph Spak reiterated his 12-month Sell rating on Tesla shares on Monday, voicing considerable concern on the near-term demand outlook for the Model 3 and Model Y. He slashed his price target on Tesla to $225 from $259.
The consensus price target on the Street is $239, according to Yahoo Finance data.
The stock tanked 8% to $242 in early trading alongside a broader hit to markets due to tariff concerns.
As of 12:21:07 PM EDT. Market Open.
“While the long-term story at Tesla has shifted to AI (robo-taxis and humanoid robots) and progress there continues, we believe these are longer dated opportunities that the premium multiple already (more than) considers. Stock is currently trading at 90x P/E on consensus (EPS) estimates for 2025, but again we believe that is too high,” Spak said.
Spak forecasts first quarter deliveries for Tesla to decline 5% year over year and 26% sequentially. His new deliveries estimates is 13% below current consensus estimates.
Listen: How Elon Musk delivers on big ambitions
The bearish note is the latest dreadful news for the Tesla faithful.
Tesla shares are down 40% year to date and are the worst-performing component of the “Magnificent Seven” stocks — which also include Apple (AAPL), Amazon (AMZN), Nvidia (NVDA), Google (GOOG), Microsoft (MSFT), and Meta (META).
The stock fell 28% in February alone versus a modest drop for the S&P 500 (^GSPC). Shares are down 7% in February compared to a 3% decline for the S&P 500.
The weakness in sentiment reflects more than just concern that Elon Musk’s closeness with Trump is turning away buyers around the world (though alleged attacks at Tesla stores are fueling this narrative).
Tesla sold just 26,677 vehicles in China’s market in February, according to data released today by the China Passenger Car Association. The figure marked an 11.16% drop year over year and 20% decline from January.
At the same time, Australia’s Electric Vehicle Council reported that Tesla’s overall sales fell 72% year over year in February.
In the US, prices on used Cybertrucks, Model 3s, Model Ss, Model Ys, and Model Xs continue to drop. Tesla is facing increased EV competition from General Motors (GM) and Ford (F), while some consumers are opting for hybrids.
In the past 90 days, the average price of a Tesla has declined 4%, according to data from CarGurus. The fastest price declines are in Cybertrucks, followed by the Model S.
Meanwhile, new tariffs from the Trump administration stand to raise costs for Tesla and other automakers.
