03:23 PM EDT, 06/24/2024 (MT Newswires) -- Tesla (TSLA) is now expected to post a year-over-year decline in deliveries for the second quarter as demand in key European markets waned, UBS said Monday.

The brokerage lowered its deliveries estimate to 420,000 from a prior view of 471,000, which UBS analysts Joseph Spak and Patrick Hummel said in a note was "admittedly too high."

While the earlier estimate would have marked an increase from the 466,140 vehicles Tesla delivered in the second quarter of 2023, the new estimate projects a 10% year-over-year decrease. At that level, Tesla deliveries would be up 9% from the first quarter.

UBS's forecast is about 5.5% below the Visible Alpha consensus of 445,000, the report showed. Buyside expectations are closer to the 410,000 to 425,000 unit range, according UBS's assessment of investor conversations.

In Europe and the UK, Tesla's deliveries are tracking down 28% quarter over quarter through May and 25% year over year based on European Automobile Manufacturers Association data, according to UBS. European sales are being pulled lower "primarily by falling demand in Germany, France and Norway," Spak and Hummel said.

Germany sales were down 62% through May on a quarter-over-quarter basis and 54% from last year. In Norway, sales in the first two months of the quarter were down 41% from the first quarter and 57% from the same period of 2023. In France, sales were down 36% sequentially and 30% annually, according to the note.

"While June is typically the largest month for (Tesla) deliveries in Europe, the pace suggests a tough quarter in Europe," the analysts said. In China, deliveries are expected to improve but auto gross margins in both China and the US could be impacted by incentives, they added.

UBS reiterated a neutral rating and $147 price target on Tesla's stock. The firm's second-quarter earnings per share target of $0.62 is above the consensus view of $0.60. For the year, however, UBS is modeling EPS of $2.47, below Wall Street's $2.56 projection.

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