The premium attached to Tesla’s stock is increasingly difficult to justify as the company’s core auto business deteriorates while enthusiasm over the effect of artificial intelligence on its future growth could wane, according to UBS. UBS analysts led by Joseph Spak downgraded Tesla to sell, though they increased their price target by $50 to $197 per share. The higher target still implies 18% downside from Thursday’s close of $241.03 per share. “While TSLA is investing heavily in AI and the tech is making progress, investment is costly, pace of improvement may slow and the payoff is long dated,” Spak and his team told clients in a Friday note. “If market enthusiasm for AI diminishes, this may impact TSLA’s [price-to-earnings] multiple.” UBS, after running the numbers, found that Tesla’s core auto business represents just $57 of the company’s stock price while its energy business is worth $18 per share and its robo-taxi ambitions could equal $18 per share. But taken together, this is only $93 of identifiable value in the current share price, which means future option value represents 61% of today’s stock, the UBS analysts said. “We believe that unidentifiable premium is too significant,” Spak and his colleagues said. “Given the lack of visibility and the risk that these growth opportunities materialize on a longer time horizon (or don’t materialize at all), we rate the stock Sell.”