📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Stifel initiates Tesla stock with a Buy rating, sees 45% upside potential

Published 06/25/2024, 04:17 PM
© Reuters.

Stifel initiated research coverage of Tesla (NASDAQ:TSLA) with a Buy rating and setting a price target of $265, which implies an upside potential of about 45% based on Tuesday's closing price.

Stifel noted Tesla's strong positioning to deliver robust growth from 2025 to 2027 and beyond.

"In the near term, the revamped Model 3 and upcoming Model Y refresh should bolster sales, followed by the commencement of its next-generation vehicle (Model 2) production, which will likely garner very strong demand," analysts wrote.

"We also believe TSLA's AI-based Full Self-Driving (FSD) initiative has the potential to generate significant value through sales of FSD, possible licensing agreements, and as a critical driver of longer-term RoboTaxi initiatives."

Tesla, led by CEO Elon Musk, is recognized as the global leader in the EV market, holding a dominant share in the United States. Stifel's confidence in Tesla stems from its robust technology portfolio, global manufacturing footprint, and strong profitability.

The brokerage firm also pointed out Tesla's vast global supply chain and internal manufacturing as factors supporting cost advantages and margins.

The Supercharger network was also mentioned as a key element driving brand loyalty, sales, and profitability for Tesla.

Stifel believes that Tesla's pure AI-based FSD technology could generate significant value. This includes sales of the FSD software, possible licensing agreements, and its critical role in the development of RoboTaxi initiatives in the longer term.

Moreover, Tesla's energy generation and storage business is seen as a potentially significant growth driver.

Despite acknowledging near-term risks such as the lackluster first-quarter results in 2024 and potential headwinds in EV adoption, as well as uncertainties surrounding the U.S. election, Stifel suggests that recent downward estimate revisions for Tesla's stock are likely finished, which could remove an overhang on shares of the EV maker.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.