Tesla Motors’ status as a darling of Wall Street is slipping, with UBS becoming the third investment bank this month to downgrade the EV maker. UBS analyst Colin Langan, who expects the firm’s car and home battery sales growth to disappoint, slashed his rating on Tesla from Neutral to Sell.

Tesla Motors Inc Hit With Third Downgrade In One Month

Stock rising on expectations, not on facts

A few months back Tesla unveiled Tesla Energy, which is intended serve homes and offices with power backup. The EV maker received orders of more than $800 million in the first five days.

“However, this pace is misleading as customers did not put down deposits, so these are just solicitations of interest,” said Langan.

Langan is of the view that Tesla stock has already factored in the deliveries of over 1.5 million vehicles in 10 years, and the full utilization of the company’s battery capacity, which the analyst believes is unlikely. The analyst notes the EV maker will start to add up inventory in the next 10 years as the demand for its cars loses steam.

UBS lowered its earning estimates for the company for the year 2015 and 2016. Reasons cited are rising R&D and general operating costs owing to heavy spending on the Model 3 and the battery business. Langan slashed his price target to $210 from $220.

Should Tesla investors be worried?

Earlier this month, both Deutsche Bank and Pacific Crest downgraded Tesla citing concerns over its valuation. Deutsche Bank lowered its rating from Buy to Hold while Pacific Crest changed their rating from Overweight to Sector weight.

On Monday, Tesla shares hit its highest mark this year at $286.65, having risen around 25% since the launch of Tesla Energy. As of June 30, approximately 19% of the company’s outstanding shares were sold short, which is down marginally from 19.6% as on April 30. After the UBS downgrade, of the 20 analysts covering Tesla, four rate it a Sell, ten analysts consider it a Buy while the remaining six rate it Hold. The stock has a median price target of $309. Thomson Reuters data reveals Tesla is trading expensively at 154.3 times forward earnings versus its median of 111.

Even after the third downgrade, investors don’t have to worry much as the company has plenty of positive news lined up to keep investors interested.

On Tuesday, Tesla shares closed down 5.49% at $266.77, but year to date the stock is up over 20%.