Tesla, once a darling on Wall Street, is facing tough times as major financial analysts grow increasingly skeptical about its prospects. With the electric vehicle pioneer revealing mounting losses, both UBS and Redburn Atlantic have reiterated their cautious stance by maintaining sell ratings on Tesla shares ahead of the company’s April delivery report and first-quarter results. Concerns primarily stem from sluggish delivery forecasts for the Model Y and a perceived lack of immediate growth catalysts. UBS has trimmed its price target for Tesla by $24, setting it at $225, which indicates the possibility of a 14% downturn. Redburn is even more pessimistic, with a price target of $160, suggesting a potential decline of over 39%.
The challenges facing Tesla are multifaceted. Redburn analyst Adrian Yanoshik highlights a possible stalling in vehicle volumes without new launches on the horizon. He notes that “‘sluggish registration data to-date may flag a lingering demand challenge,’ while refreshed Model Y deliveries, which began in March, exacerbate pressures on cash flows amid higher inventories.” Furthermore, the looming threat of U.S. tariffs on imports from Mexico could add to Tesla’s cost burdens.
Despite a steep 9% drop in Tesla shares on Monday, contributing to an over 40% year-to-date fall, concerns linger that the stock might continue its slide. If the current trend persists, Tesla could witness its worst losing streak in 15 years as a publicly traded entity, marking an eighth consecutive week of declines. The sentiment was echoed by several firms, including Bank of America, Baird, and Goldman Sachs, all of which have recently reduced their price targets on Tesla.
The shifting landscape in the automotive industry is not helping Tesla either. The company faces increasing competition from autonomous vehicle manufacturers in China and is grappling with declining vehicle sales in the U.S. and Europe. Additionally, CEO Elon Musk’s political activities have sparked protests, further casting doubts on Tesla’s traditionally bullish outlook that hinges on expanding beyond mere automobile production. Although the vision includes ambitious plans for AI-driven robotaxis and humanoid robots, analysts like UBS’s Joseph Spak caution that these advancements are distant prospects and, for now, are already reflected in Tesla’s currently high valuation. Spak has adjusted his 2025 delivery forecast, predicting softer demand for Tesla’s Model 3 and Model Y in pivotal markets. While some recovery in auto gross margins is anticipated for the second quarter, potential pricing pressures on older Model Ys could still hinder performance. He also warns that Tesla’s plans for a lower-cost vehicle might offer less profit margin.
Across analyst ratings, the divide is evident: out of 54 ratings tracked by LSEG, only three classify Tesla as a sell, with nine rating it an underperform and 16 maintaining hold ratings. Meanwhile, 26 analysts still recommend either buying or strongly buying Tesla shares. Despite these mixed signals, Tesla’s current challenges underline the uncertainties facing a company once heralded for its innovative strides in the automotive industry.
Original Source: https://www.cnbc.com/2025/03/10/worries-about-tesla-sales-grow-as-two-more-analysts-reiterate-sell-ratings.html
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Publish Date: 2025-03-10 20:58:00
