Tesla stock (TSLA) fell more than 10% on Monday as another bearish call from Wall Street sent shares to their lowest level since the day before the presidential election and 50% from its record closing high of $479 seen on Dec. 17.
In a note to clients on Monday, analysts at UBS lowered their price target on the stock to $225 from $259, citing lower delivery forecasts for the first quarter it sees resulting from softer demand for Tesla’s Model 3 and Model Y vehicles. The firm maintained a Sell rating on the stock.
UBS now expects the company to deliver 367,000 cars in the first quarter, down from the 437,000 it said it had “plugged in as a placeholder” after Tesla’s fourth quarter results in late January.
The firm now sees deliveries falling 5% over last year and 26% from the prior quarter in Q1, adding: “Our UBS Evidence Lab data shows low delivery times for the Model 3 and Model Y (generally within 2 weeks) in key markets which we believe is indicative of softer demand.”
The stock was also pressured by news that shipments in China fell 49% from last year in February to the lowest level in almost three years.
As of 12:37:03 PM EDT. Market Open.
With Monday’s drop, Tesla stock has now forfeited more than all of its post-election gains, with this decline another piece of the persistent unwind of the “Trump trade” that has defined market action in recent weeks.
Tesla stock has dropped about 18% since the start of March alone.
Still, the plunge has prompted some of Tesla’s biggest bulls to come out in defense of the name in recent days. Last Thursday, Wedbush analyst Dan Ives doubled down on his pro-Tesla views, calling the current slump a “gut check moment for the Tesla bulls (including ourselves).”
Ives added Tesla to the firm’s “Best Ideas List” and reiterated his Outperform rating and $550 price target. He also noted this is not the first time Tesla has seen a drawdown of this magnitude, writing, “There have been a number of times in the Tesla story over the past decade that negative sentiment and Street worries have overshadowed the narrative of this unique disruptive global tech story.”
Morgan Stanley analyst Adam Jonas also recently reiterated his bullish view on Tesla, forecasting shares will rise to $430 as the company diversifies into artificial intelligence and robotics. The analyst reinstated Tesla as a top pick for the auto sector.
“Tesla’s softer auto deliveries are emblematic of a company in the transition from an automotive ‘pure play’ to a highly diversified play on AI and robotics,” wrote Jonas in early March. He added the company’s 2025 deliveries could decline year over year, but that this would be “creating an attractive entry point” for investors.
