HSBC keeps Tesla Stock at “Reduce” Over Concerns About Long-term Growth Sustainability.

investing

Tesla Stock Rated “Reduce” by HSBC Over Growth Concerns
Tesla’s glowing brand power contrasts with red-flag concerns raised by HSBC over long-term growth and valuation.

The new performance of Tesla remains ambivalently regarded by analysts. HSBC has maintained a rating of “reduce” on the stock it had and has provided the price target of the stock to be $120. Tesla surprised analysts in Q2 2025 by offering 384,122 vehicles but this high result raises concerns because of sustainability doubts. The company noted that almost 50% of the quarter deliveries occurred in June which is an unusually large figure that leaves doubts as to whether this rate can be maintained.

HSBC has found this rise could be a temporary strength and not a continuation of the progress and this could be because purchases have been rushed by buyers in fear that new policies on taxes will come. Their point of view is that Tesla will probably not be able to deliver as much in the nearest months. With good Q2 results Tesla is down 13% on first half sales compared with the prior year which was already a weak period. This is an indication of the fact that the company might have greater problems in terms of demand.

The valuation of Tesla is also surprising. Its price earnings (P/E) ratio stands at 165 which is higher than the industry standards. Its gross profit margin is at 17.66% and it is valued at more than a trillion dollars but there has been no serious update in its line of models in recent times. Then there is growing competition with other car companies as Tesla is taking longer to roll out a cheaper model.

In the meantime, Rivian is in the spotlight following the news of it obtaining a billion-dollar investment in Volkswagen. The transaction is mired in the larger alliance of $5.8 billion aimed at making joint technological initiatives which makes Relivan much more stable. Although the stock is rated by certain companies such as Deutsche Bank and Oppenheimer, they say that Tesla has been displaying uneven performance including the performance of its energy storage segment. To summarize Tesla has challenges with its high valuation and its current delivery growth that allow raising genuine concerns. To decide whether the momentum is going to stay here or whether HSBCs pessimism turns out to be accurate, investors might have to monitor Q3 figures closely.

HSBC reiterated its Reduce rating on Tesla (NASDAQ: TSLA) with a price target of $120.00, citing concerns about the sustainability of recent delivery growth. According to Investing Pro data, analyst targets for Tesla range from $115 to $500, with 14 analysts recently revising their earnings expectations downward.

NOTE: TECHi Two-Takes are the stories we have chosen from the web along with a little bit of our opinion in a paragraph. Please check the original story in the Source Button below.

Source