Tesla Target More Than Doubled at UBS. It’s Still a Sell

(Bloomberg) — Tesla (NASDAQ:) Inc.’s price target was more than doubled at UBS to $410 from $160, even though the bank restarted its coverage of the electric-car maker with a sell rating.

UBS analyst Patrick Hummel said in a note that Tesla has the potential to become the most profitable original equipment manufacturer. Still, he thinks the shares are over-shooting after more than doubling in the past three months, while risks in execution and U.S. demand following the phase-out of electric vehicle tax credits seem to get ignored.

UBS’s new $410 price target is still about 28% below Tesla’s closing price on Wednesday. The shares have surged of late amid a surprise third-quarter profit and strong deliveries for the fourth quarter, while the company’s market capitalization topped $100 billion on Wednesday.

The stock has nine buy ratings, 11 holds and 17 sells, with an average price target of about $370, according to Bloomberg consensus estimates.

The shares fell 1% in U.S. pre-market trading, weighed down by a downgrade to neutral from outperform at Exane BNP Paribas (PA:).

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