UBS lifts BYD stock price target to HK$540 on sales outlook

UBS analyst Paul Gong raised BYD Co Ltd's price target to HK$540.00 from HK$450.00, reiterating a Buy rating, driven by optimism regarding the company's growing overseas sales and potential to capitalize on Tesla's perceived weaknesses. The revised target reflects findings from a 2025 UBS consumer survey indicating increased European acceptance of BYD, with Gong anticipating improved margins from higher export contributions. Consequently, EPS estimates for 2025-2027 have been raised by 6-10%, exceeding consensus by 5-29%.

Analysis

UBS has significantly upgraded its outlook for BYD Co Ltd, increasing the price target to HK$540.00 from HK$450.00 and reiterating a Buy rating. This heightened optimism is primarily driven by BYD's expanding international sales, particularly in Europe, where a 2025 UBS Evidence Lab Consumer Survey indicates rising consumer acceptance. Analyst Paul Gong attributes part of this potential to perceived weaknesses in Tesla's product lineup and brand image, suggesting BYD is well-positioned to capture greater global market share. Furthermore, UBS anticipates that increased export contributions will bolster BYD's profit margins. Consequently, earnings per share (EPS) estimates for BYD for the 2025-2027 period have been revised upwards by 6-10%, placing them 5-29% above current consensus estimates. This revision underscores UBS's confidence in BYD's international expansion strategy and its capacity to enhance profitability within the competitive electric vehicle sector.

Key Decisions for Investors

• Investors should consider the positive sentiment and raised price target from UBS as indicative of BYD's strong growth prospects, particularly in overseas markets.
• Monitor BYD's execution on its international expansion strategy and actual margin improvements from exports, as these are key drivers of the upgraded EPS forecasts which are notably above consensus.
• Evaluate BYD's competitive positioning relative to peers like Tesla, as capitalizing on perceived competitor weaknesses forms a part of UBS's bullish thesis.