One of the "bears" on Tesla has dropped advice to sell its shares. What changed?
The valuation from UBS is not yet a "buy" recommendation, but still a positive signal for Tesla, Barron's notes
UBS upgraded Tesla's stock rating from "sell" to "hold" a week before the quarterly earnings release / Photo: 24K-Production / Shutterstock.com
UBS analyst Joseph Spak upgraded Tesla shares from Sell (sell recommendation) to Hold (hold recommendation), Barron's reported. At the same time, Spak left the target price unchanged at $352. That's down 3% from the stock's closing level on Tuesday, April 14th.
The current share price "more balanced" reflects short-term demand challenges, including rising costs for robotaxi startups and robot development, as well as declining electric vehicle sales, the UBS analyst said. In the longer term, Spak expects progress toward artificial intelligence, including the development and deployment of robotaxis and robots, so he values the company at about $1.6 trillion including all shares that could be issued. Tesla's current capitalization is $1.36 trillion.
The valuation from UBS is not yet a "buy" recommendation, but still a positive signal for Tesla, Barron's said. Tesla shares rose 3.3% to $364.2 in Tuesday trading. However, they remain down 19% year-to-date. The stock has lost almost one-fifth of its value since its fourth-quarter report was released in late January. Pressure on investor sentiment comes from lower profit forecasts and rising capital expenditures, Barron's explains. The company has been slow to expand its robotaxi service, launched in June. CEO Elon Musk expects Tesla robotaxis to appear in "dozens" of cities in 2026, but so far commercial operations are only in Austin, the publication notes.
The company will release its first-quarter earnings report on April 22. Wall Street expects EPS of $0.38 versus $0.27 a year ago. One of the reasons for the profit growth should be higher deliveries: in the first quarter of 2025 Tesla delivered about 358,000 cars against 337,000 a year earlier, Barron's writes.
Overall, 46% of analysts covering Tesla stock recommend buying it, according to FactSet. For companies in the S&P 500, that figure is typically 55-60%, Barron's notes. Right now, about 15% of analysts recommend selling Tesla stock - that's about twice the average for S&P 500 companies, the publication emphasizes. The average target price for Tesla shares is about $405, which is 11% higher than the current value of the securities.
This article was AI-translated and verified by a human editor
