Tesla shares rose last week after third-quarter earnings beat expectations and CEO Elon Musk provided upbeat guidance.
Wall Street analysts had largely positive reviews while maintaining buy ratings for Tesla shares, although not everyone is convinced.
Early Thursday, the morning after the earnings report, Bank of America reiterated a buy rating and raised its price target to $265 from $255. By market close on Friday, shares had already surpassed that high opinion, rising 3.3% at $269.19 after rising 22% in the previous trading session.
However, the third-quarter earnings numbers were so strong that Bank of America also boosted its earnings forecasts for the full year of 2024 as well as for 2025 and 2026. Analysts also highlighted bullish comments on the earnings call, such as production growth of 20% to 30% afterward. year (presumably supported by a new EV model), autonomous Cybercab prospects, improvements to the Full Self-Driving Assist feature, lower 4680 battery costs, and upside potential for regulatory approval sales.
“The bottom line is that Tesla is poised for the next wave of growth,” Bank of America wrote.
Can Tesla shares be bought now?
Summing up their investment thesis, the bank’s analysts said the company is a leader in electric vehicles and could succeed as demand increases over time, while its self-financing status and access to cheap capital should lead to further growth.
“TSLA has re-energized the growth narrative with comments and results that act as a near-term catalyst for the stock, such as the Robotaxi event in August, a new product launch by early 2025, and the potential licensing of FSD,” they added. “Therefore, we rate the stock a buy.”
At Morgan Stanley, analysts maintained a “Top Pick” designation on Tesla stock and backed a $310 price target, focusing on the company’s expectations for 20% to 30% volume growth.
Likewise, Wedbush reiterated an outperform rating on Tesla stock and a $300 price target, with analyst Dan Ives also citing broader growth and margin expectations.
But analysts at JPMorgan rated Tesla stock Underweight and set a price target of $135, which would imply a decline of about 50%.
The bank warned that some of the catalysts for strong earnings in the third quarter, such as regulatory credits sold to companies that do not meet emissions requirements, are not sustainable in the long term.
“As other automakers expand their electric offerings, over time they should be in a position to generate their own credits, eliminating and ultimately eliminating the flow of competitor payments to Tesla,” she said.
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