The financial analysts at UBS Global have adjusted their Tesla price target, based on concerns with rising local competition in China, reports Yahoo! Finance.
While UBS maintained its ‘neutral’ rating on Tesla’s stock, the firm adjusted its price target down from $730 USD to $660 USD. In addition, UBS Global has also reduced its EPS estimates for the company by 11% for 2021, and 10% for 2022.
The UBS analysts, led by Patrick Hummel, foresee momentum in the EV space slowly going the way of Tesla’s competition, especially in the Chinese market where domestic competition is abundant and Tesla is “the outsider”.
Tesla has also been hit with gripes over product quality from regulators and consumers alike in China. The recent ‘remote recall’ of over 285,000 cars in China this week certainly didn’t help Tesla’s woes in the region.
The analyst report also cites delays in the Model Y’s Europe launch, Full Self-Driving (FSD)’s official fleet-wide roll-out, and Tesla’s next-generation 4680 batteries as major concerns.
The report does conclude that Tesla is a cut above the competition when it comes to software and is looking at a lucrative robotaxi opportunity down the line, adding much-needed weight to its market cap.
“Fundamentally, we argued in our deep-dive report that ~$400 billion market value could be justified by the software complex — this includes a large robotaxi opportunity in 2030,” says the report.
At the time of this writing, Tesla shares are trading at $680 USD — down 24% since reaching an all-time high of $900 on Jan. 25, but also up compared to spending time at the mid-$500 range.
