Tesla (TSLA) - Get Free Report shares edged lower Tuesday after analysts at UBS cut their price target on the clean-energy carmaker, citing intensified competition from European and U.S. rivals and a shrinking lead in EV sales from China.
UBS analyst Patrick Hummel held his 'neutral' rating on the stock in place, but lowered his price target by $70, to $660 per share, ahead of the group's highly-anticipated second quarter delivery figures due later this week.
UBS is looking for a second quarter delivery total of 195,000, comprised mostly of Model 3 and Y deliveries with 5,000 S and X tacked on, but noted that "the demand situation in China remains a concern, with local EV brands rapidly gaining share."
"German premium incumbents Audi, Mercedes and BMW are still preferred vs. Tesla in face-to-face competition," Hummel said. "In light of the EV product offensives by VW Group, GM, Ford and Hyundai, we expect Tesla's lead to shrink from here."
"In China, Tesla is still in the lead but with a slight negative year-on-year trend while local EV brands have climbed in the rankings," he added.
Tesla shares were marked 0.6% lower in early trading Tuesday to change hands at $685.50 each.
Founder and CEO Elon Musk hinted at an 800,000 2021 delivery target earlier this year after the group posted a record 499,950 tally for 2020, which it followed-up with a record first quarter total of 184,800 and revenues of $10.4 billion.
Improving China demand, however, could take Tesla's second quarter total past 200,000 when the figures are published later this week, with data from the country's Passenger Car Association showing massive gains from last year's pandemic-hit base and a run-rate of around 92,000 deliveries for the three months ending in June.
Tesla will publish its second quarter delivery totals on either Thursday or Friday, with second quarter earnings expected on July 28.