8 Tesla Analysts Size Up Next-Gen Vehicles, FSD, AI And More: ‘Potential To Be A Transformational Technology Company, Deliver Outsized Returns’

8 Tesla Analysts Size Up Next-Gen Vehicles, FSD, AI And More: ‘Potential To Be A Transformational Technology Company, Deliver Outsized Returns’

Electric vehicle leader Tesla Inc (NASDAQ:TSLA) reported first-quarter revenue and earnings per share that missed Street consensus estimates. 

Here’s a look at what analysts are saying after the report and for the future of the company. 

The Tesla Analysts:

  • Truist analyst William Stein has a Hold rating and lowers the price target from $176 to $162. 
  • Piper Sandler analyst Alexander Potter has an Overweight rating and a price target of $205. 
  • Bank of America analyst John Murphy upgrades shares from Neutral to Buy and has a price target of $220. 
  • Needham analyst Chris Pierce has a Hold rating and no price target. 
  • Mizuho analyst Vijay Rakesh has a Neutral rating and lowers the price target from $195 to $180. 
  • Goldman Sachs analyst Mark Delaney has a Neutral rating and price target of $175. 
  • Oppenheimer analyst Colin Rusch has a Perform rating and no price target. 
  • Roth MKM analyst Craig Irwin has a Neutral rating and price target of $85. 

Related Link: Tesla Stock Is Ripping Higher Wednesday: What’s Going On?

Truist on Tesla: New products and artificial intelligence developments could help the company, Stein said in a new investor note. 

“Tesla’s Q1 result was modestly below consensus, but messaging around new auto products and improving AI developments were distinctly positive surprises, likely smoothing performance between the prior, growth wave and the next growth wave,” Stein said. 

The analyst said Tesla has several risks, which include price cuts and the overhang of CEO Elon Musk‘s compensation package being voted on by shareholders. 

“The most important update today is that, instead of waiting for the next-gen platform to drive a wave of growth starting in late 2025, Tesla now plans to release more iterative versions of vehicles before late 2025 using aspects of the next gen platform.” 

The analyst said this push could help “smooth the transition” for the company’s waves of growth. 

Piper Sandler on Tesla: First quarter results from Tesla were better than expected, Potter said. 

The analyst said investors likely expected the worst with recent reports of weak deliveries and mass layoffs.

“Make no mistake: the TSLA thesis hinges on A.I. and self-driving software, but in the more immediate term, we think today’s call was enough to partially address bearishness,” Potter said. 

Bank of America on Tesla: The first quarter results may have gotten Tesla past several negative catalysts, Murphy said. 

The analyst said the quarter was better than expected. 

“Management commentary addressed key concerns and revitalized the growth narrative.” 

Positive catalysts for Tesla include investments in AI, a potential licensing agreement of FSD with a global OEM, new products and more, the analyst said. 

“The combination of all of these may not structurally change the long-term path of the company, but in the near-term the tide in news flow appears to suggest the risk to the stock is skewing more positively.”

Needham on Tesla: After the first-quarter report, Tesla still has near-term concerns, Pierce cautions investors. 

“At a high level there is no change to our view,” Pierce said. “We see a company where the base business has yet to show improvement and is arguably getting worse given more vehicle price cuts were announced just this week and the modeling and timing of growth drivers.” 

The analyst said Tesla has opportunities in verticals outside automotive, which differentiates it from its OEM peers, but cautions on valuation. 

“We see FSD and TSLA’s other bets as priced into the stock given its steep valuation premium vs the projected earnings growth in our model.” 

Pierce said near-term demand remains a big issue with recent price cuts being a headwind for the stock. 

Mizuho on Tesla: A weakened outlook on electric vehicles and pressure on prices could impact Tesla in 2024, Rakesh said. 

The analyst said comments on accelerating a lower-cost model could ease concerns of the Model 2 being canceled, it could impact lower margins and profitability.

“We continue to estimate Model 2 ramps likely in 2H25E,” Rakesh said. 

The analyst said full autonomy remains years out with regulatory, performance and technological challenges remaining. 

“We see TSLA maintaining EV cost and product leadership, as well as benefits from its AI and robotaxi opportunities, though we believe EV demand near-term remains a challenge.” 

Goldman Sachs on Tesla: While the first quarter report was better than expected, Delaney said there are still concerns on deliveries, margins and autonomy. 

“We believe the report was better than relatively low investor expectations,” Delaney said. 

The analyst said Tesla has a long-term opportunity with increased vehicle volumes and software. 

“We believe many of the key investor debates on the stock will continue to relate to vehicle volumes, gross margins, and the outlook for FSD/robotaxis.” 

Oppenheimer on Tesla: Uncertainty remains for the electric vehicle leader, Rusch said after the first-quarter earnings report. 

The analyst said comments on pulling the Model 2 ramp forward lacked detail, which could mean the company is still determining the benefit of the move. 

“At the same time, TSLA is emphasizing its focus on multiple AI applications, starting with FSD. While we see TSLA as the global leader in AI for the physical world, we expect this transition to be choppy as the company works to improve the technology and begins to pioneer pricing in these markets,” Rusch said.

The analyst said execution on Model 3 and Model Y volumes and cost reductions are critical to having the operating margins and cash flow to support its “sustainable profitability.”

“We believe TSLA has the potential to be a transformational technology company and deliver outsized returns.”

ROTH MKM on Tesla: Shifting the focus to a low-cost vehicle is needed for growth, Irwin said. 

The analyst said unveiling the robotaxi on Aug. 8 could backfire if the product is more of a CyberTaxi. 

“Expectations for Robotics, including planned sales of an Optimus sentient humanoid robot by YE25, are likely overoptimistic,” Irwin said. “Considering negative growth and low visibility for troughing estimates the valuation appears even more stretched in our view.” 

The analyst said the share price indicates the company will execute well and is valued at an oversized premium to peers. 

“The market valuation appears to rest on the assumption that competing EVs slated for launch by YE25 will all be flops.” 

TSLA Price Action: Tesla shares are up 9% to $157.79 on Wednesday versus a 52-week trading range of $138.80 to $299.29.

Read Next: Elon Musk Echoes Cathie Wood, Wants Tesla To Be Seen As An AI Or Robotics Company: ‘If You Value Tesla As Just An Auto Company…Wrong Framework’

Image generated using artificial intelligence via Midjourney.

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