UBS Bank Expects Tesla Stock to Dive 48%
Tesla stock is down slightly but UBS expects it to fall much further in the futures as the bank says tesla stock is overvalued.
Quick overview
- Tesla (TSLA) stock is currently priced at $485, but UBS predicts a significant decline to a target of $247.
- UBS has downgraded its expectations for Tesla's vehicle deliveries in Q4 2025 from 129,000 to 415,000.
- Despite recent gains, analysts are concerned that Tesla's stock may have risen too quickly amid declining EV sales.
- Tesla is focusing on launching a robotaxi service and new vehicle options to boost sales and leverage AI technology.
Tesla (TSLA) stock is at $485 after dropping 0.84% from the previous day, but investment bank UBS anticipates it will fall much further and set a price target at $247.
UBS says investors should sell their Tesla stock, as they expect the price to tank in the coming weeks. Their price target is 48% below the current price per share, and they have also downgraded their expectations for vehicles delivered for Tesla’s 4th 2025 quarter.
Previously, UBS expected that Tesla would deliver around 129,000 vehicles for the 2025 Q4, but they dropped that to 415,000 recently. Tesla is trading well above UBS’ price target- a target which is far more bearish than the broad average that rides the line between holding and selling the stock.
Tesla’s Recent Performance Might Be Too Optimistic
Like much of the stock market, Tesla stock is performing well and is far higher now than it was a month ago. The company is seeing their stock climb on improved AI market sentiment as well as consumer confidence in the economy. The recent Federal Reserve interest rate decision has also bolstered the market and emboldened investors to take some chances they were not willing to take in November.
Historically, Tesla tends to perform better than Wall Street expectations, and they will have a chance to do so again on January 2nd when they release their fourth-quarter numbers for 2024. Analysts are worried, though, that Tesla has climbed too quickly and too high in recent weeks, gaining 15.7% over the last month. That stellar performance has been in spite of waning EV sales and a somewhat sluggish stock market.
At last count, Tesla inventory was sitting at record levels, and their vehicle sales were missing the company’s sales targets for the year. Electric vehicles sales were up early on in the year for the market overall but low for Tesla. As the year progressed, EV sales fell, with the broader market matching Tesla’s poor sales performance.
However, Tesla has been pivoting for months now, focusing on a robotaxi launch in several major cities around the United States and pushing their plans for new vehicles, a cheaper EV option, and new AI technology. With the robotaxi service showing some success, Tesla now has to prove that they can increase EV sales and make their new AI tech work as promised.
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