Tesla (TSLA) stock extended its losses on Monday, dropping 15.4%, the biggest decline among the Magnificent 7 stocks. Year-to-date, Tesla shares are down about 45%. The EV maker is facing mounting challenges as competition from Chinese manufacturers intensifies. At the same time, CEO Elon Musk’s political views have sparked backlash, hurting consumer sentiment. Adding to these troubles, UBS analysts slashed Tesla’s price target to $225 from $259 while maintaining a Sell rating, citing weak deliveries and shrinking profit margins.
UBS Slashes Delivery Outlook
UBS now expects Tesla’s 2025 earnings per share (EPS) to be 30% below market estimates and believes that Tesla stock is overvalued compared to its financial performance.
The firm cut its first-quarter 2025 delivery forecast to 367,000 vehicles, down from 437,000. This reflects a 5% year-over-year drop and a 26% decline from the previous quarter. UBS warned that Tesla may rely on heavier discounts and promotions to maintain sales.
UBS also cut Tesla’s 2025 delivery forecast to 1.7 million vehicles, down 5% and 14% below market expectations for 10% growth. While Tesla’s upcoming Model Y refresh (codenamed Juniper) could help demand, UBS believes rising competition and pricing pressure, especially in China, will remain major hurdles.
UBS Lowers EPS Expectations
In light of these concerns, UBS cut its 2025 EPS forecast to $2.02 from $3.16. It also lowered its 2026 EPS estimate to $2.81 from $3.99.
While UBS acknowledges Tesla’s long-term potential in AI projects like robo-taxis and humanoid robots, the firm believes these opportunities are already priced into the stock’s high valuation.
Is Tesla a Good Stock to Buy?
On Wall Street, analysts have maintained a neutral stance on Tesla stock. According to TipRanks, TSLA stock has received a Hold consensus rating, with 13 Buys, 11 Holds, and 12 Sells assigned in the last three months. The average price target for Tesla shares is $340.31, suggesting a potential upside of 53.19% from the current level.
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