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Tesla (TSLA) shares lost another 14% on Monday, March 10 amidst concerns that President Donald Trump’s tariffs could push the U.S. economy into a recession.
Investors are also concerned that billionaire Elon Musk’s close association with Trump is making some consumers distance themselves from Tesla.
Together, these factors have led to a 45% decline in TSLA share price over the past three months. Tesla stock now sits significantly below its price on Election Day after losing more than $700 billion in market cap since its peak on Dec. 18.
Still, a UBS analyst cautions against diving head first into TSLA in hopes of a swift recovery.
Tesla Stock Could Sink Further to $225
UBS analyst Joseph Spak maintained his “Sell” rating on Tesla shares this morning and lowered his price target on the electric vehicle giant to $225.
His downwardly revised price target warns of potential downside of another 2% from here.
Versus Q4, the investment firm expects Tesla’s deliveries to be down 26% in its current quarter following reports of significant weakness in both Europe and China.
Aggressive promotions, its analyst argued, could help improve demand but will likely result in material pressure on the company’s profit margin in 2025.
TSLA Is Grappling With a Demand Slowdown
In his research note on Monday, analyst Joseph Spak also argued that Tesla’s expected lower-cost models “may take some demand away from” its existing Model 3 and Model Y vehicles.
Spak remains bearish on the EV stock also because he expects them to be “lower margin” offerings.
UBS now expects Tesla to deliver 1.7 million vehicles this year, down about 5.0% versus the firm’s first-ever decline in annual deliveries in 2024. The EV company was expected to deliver 1,801,709 vehicles last year versus 1,789,226 that it actually did.
On Monday, analyst Joseph Spak also lowered his earnings estimate for TSLA’s first quarter to $0.37 cents. The consensus estimate calls for EPS of $0.56.
Other Analysts Disagree With UBS on Tesla Shares
Investors should note, however, that not all of Wall Street agrees with UBS.
The consensus rating on TSLA shares currently sits at “Hold,” but the mean target of about $353 indicates potential upside of more than 50% from current levels.
