UBS Reiterates Sell Rating on Tesla (TSLA)
UBS analyst Joseph Spak reiterated a Sell rating and $197.00 price target on Tesla (NASDAQ: TSLA)
The analyst comments "TSLA is being priced on future optionality TSLA is not being priced on auto (or arguably even Energy) but autonomy and AI. TSLA is working on AI initiatives such as robo-taxi and Optimus humanoid robots. We believe any payoff from such initiatives are further out, so on earnings updates, the realities of the business fall back to (mostly) auto. As we highlighted in our recent note, these future initiatives are difficult to value, but the current stock price already assigns a hefty value to these ventures. Elon Musk repeated a prior sentiment, stating “the value of Tesla overwhelmingly is autonomy.” The challenge is that the time frame, and probability of success is not clear. Even TSLA caveated, the “timing of Robotaxi deployment depends on technological advancement and regulatory approval.” This would normally be fine, except we believe only ~$74/share is attributed to core auto and Energy. So we believe there is already an expensive option built in to TSLA shares. To us, over the near term we see more downside to the stock if/when confidence in these initiatives waver, vs. upside from likely only incremental data points supporting the LT bull case. Robo-taxi day (now 10/10) could be a sell-the-news event."
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Shares of Tesla closed at $246.38 yesterday.