UBS maintains Tesla stock Sell rating, $225 price target

On Thursday, UBS analyst Joseph Spak maintained a Sell rating on Tesla stock (NASDAQ:TSLA) with a steady price target of $225.00. The automotive giant, currently valued at $860.93 billion, trades at a P/E ratio of 120, significantly above industry averages. According to InvestingPro analysis, Tesla appears overvalued at its current price of $265.89, with 14 analysts recently revising their earnings expectations downward. The decision comes after Tesla reported first-quarter deliveries of 336.7 thousand vehicles, marking a 32% decrease from the previous quarter and a 13% drop year-over-year. These figures fell short of the consensus estimates of 377.6 thousand, which is an 11% miss. However, Spak noted that buy-side expectations were slightly lower, anticipating around 355-360 thousand deliveries, resulting in a roughly 6% miss.

Tesla’s production for the first quarter was reported at 362.6 thousand vehicles, down 21% from the previous quarter and 16% year-over-year. Spak attributed part of the decline in production to the changeover for the new Model Y, which caused several weeks of lost production. He also highlighted an increase in inventory levels, with the cumulative production less deliveries (serving as an inventory proxy) now standing at approximately 124 thousand or about 28 "days on hand". This is a significant rise from the 15 days calculated in the previous quarter. Despite these challenges, InvestingPro data shows Tesla maintains strong financial health with a current ratio of 2.02 and more cash than debt on its balance sheet.

The UBS analyst expressed caution, anticipating negative revisions to Tesla’s delivery numbers for 2025 and potentially beyond. Current consensus forecasts for 2025 deliveries stand at 1.85 million units, which would be a 4% year-over-year increase. With Tesla’s next earnings report due on April 29, investors seeking deeper insights can access comprehensive analysis and 18 additional key metrics through InvestingPro’s exclusive Research Report, part of its coverage of over 1,400 US stocks. In contrast, UBS’s estimate is set at 1.7 million units, reflecting a 5% decrease year-over-year. Spak emphasized that in order to meet the consensus delivery numbers, Tesla would need to sustain an average year-over-year growth of approximately 8% for the remaining quarters of the year. He also pointed out that achieving even 1.6 million units for the full year would require second to fourth-quarter deliveries to be 25% higher than first-quarter levels.

In other recent news, Tesla reported first-quarter vehicle deliveries for 2025 that fell short of expectations, with a total of 336,681 vehicles delivered, missing the Bloomberg consensus forecast of 377,592. This represents a decline from the 386,810 vehicles delivered in the same quarter of the previous year. Tesla’s vehicle production also decreased to 362,615 units, below the Visible Alpha consensus projection of 437,818 vehicles. Cantor Fitzgerald maintained its Overweight rating on Tesla, keeping a price target of $425, suggesting confidence in the company’s long-term prospects despite these challenges.

Goldman Sachs reiterated a Neutral rating with a $275 price target, noting the significant decline in Tesla’s preliminary first-quarter vehicle deliveries and production figures. Truist Securities adjusted its price target for Tesla to $280 from $373, maintaining a Hold rating, and emphasized the importance of Tesla’s Full Self-Driving (FSD) technology for the company’s long-term value. In Germany, Tesla’s sales volume dropped 42.5% in March, even as the overall sales of battery electric vehicles in the country increased.

Meanwhile, Vice President JD Vance confirmed that Elon Musk will continue to serve as an adviser to President Trump, dismissing reports suggesting otherwise as "fake news."

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