Tesla will rally more than 25% as it makes progress in robotaxi development, Stifel says
Stifel believes that Tesla could get a bump higher as it makes progress on the robotaxi front. Analyst Stephen Gengaro, who has a buy rating on the electric vehicle maker, raised his price target to $508 per share from $483. The new forecast points to upside of 26% from Friday’s close. Gengaro pointed to updates to Tesla’s full self-driving system, with management planning to add “reasoning capabilities” in upcoming versions. These could help drivers find optimal parking spots, among other functions. He also applauded robotaxi progression in both existing and potential markets. TSLA YTD mountain TSLA YTD chart “Robotaxi progress continues in Austin and the Bay Area, and management noted plans to expand to roughly 8 – 10 metropolitan areas by year-end 2025. Plans for robotaxis in parts of Austin are anticipated to be implemented by the end of 2025 without safety drivers, with additional expansion plans into Nevada, Florida, and Arizona,” he wrote. “We also believe TSLA’s AI-based Full Self-Driving (FSD) initiative has the potential to generate significant value through both sales of FSD, possible licensing agreements, and as critical part of longer-term Cybercab (Robotaxi) initiatives.” Gengaro also pointed to Tesla’s strong third-quarter sales and revenue as other recent strong points for the company. In its last quarter, Tesla reported revenue of $28.10 billion, which exceeded the $26.37 billion analysts polled by LSEG had penciled in. And while Tesla’s lower-priced vehicles are coming slower than anticipated, Gengaro believes that their introduction could help soften the impact of the expiration of the electric vehicle tax credit. “We believe TSLA is very well positioned to deliver robust multi-year growth in 2024-27+,” he wrote. “In the near term, the revamped Model 3 and Model Y refresh should bolster sales, followed by the commencement of a lower-priced vehicle (Model 2) production that likely garners very strong demand.” Tesla shares are flat for the year. Analysts are split on Tesla. Of the 55 who cover the stock, 25 have a buy or strong buy rating, according to LSEG. Another 19 rate shares as a hold, while another 11 assigned underperform or sell ratings.
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