Tesla Motors Inc. declined the most in six months after UBS Group AG cut its rating on the stock to sell, citing prospects for growth in the electric-car maker’s auto and battery-storage businesses.
The shares slid 5.5 percent to $266.77 at the close in New York, the steepest one-day drop since Jan. 14. The downgrade was at least the third this month for Tesla, after reductions by Deutsche Bank and Pacific Crest Securities.
UBS analyst Colin Langan said in a note to investors Tuesday that “we expect both storage and auto volume growth to disappoint” as Tesla faces new competitors, rising costs and funding needs. UBS, which had rated the Palo Alto, California-based company’s shares as neutral, also lowered its 12-month price target to $210 from $220.
Tesla has gained 20 percent this year, as the Standard & Poor’s 500 Index has risen 2.9 percent. According to data compiled by Bloomberg, 10 analysts rate Tesla as buy, eight as hold and five as sell.