On Friday, Stifel, a financial services firm, upgraded its price target for Tesla (NASDAQ:TSLA) shares to $287.00 from the previous $265.00, while maintaining a Buy rating on the stock. This adjustment follows Tesla's strong third-quarter performance, which surpassed market expectations.
Tesla reported earnings per share (EPS) of $0.72, exceeding the consensus estimate of $0.59. The company's EBITDA also beat forecasts by 32%. In response to these robust financial results, Stifel revised its estimates upward and increased the target price.
The analyst highlighted several key factors contributing to the positive outlook for Tesla. Among them are the improved auto margins, which have benefited from reduced costs and are expected to continue their sequential rise. Another significant development is the anticipated launch of a lower-priced Tesla vehicle in the first half of 2025, which could expand Tesla's market reach.
Furthermore, Tesla is projected to achieve a 20-30% growth in vehicle deliveries in 2025. This optimistic projection is supported by the ongoing momentum in Tesla's Energy Generation & Storage business, which continues to expand its market presence.
Lastly, the firm anticipates the introduction of unsupervised Full Self-Driving (FSD) capabilities in Texas and California in 2025. This advancement is seen as a crucial step for both the FSD technology and Tesla's Robotaxi initiative, which are integral to the company's long-term valuation.
In other recent news, Tesla's Q3 results outperformed expectations, leading to a series of analyst reviews. Bernstein SocGen Group maintained its Underperform rating, while Phillip Securities upgraded the stock from Sell to Reduce, citing improved factory utilization and cost-reduction efforts. Piper Sandler confirmed its Overweight rating, noting a significant decrease in Tesla's automotive cost of goods sold per unit.
On the political front, several allies of Donald Trump have been profiting from President Biden's climate legislation, the Inflation Reduction Act (IRA). Notably, Trump's son-in-law Jared Kushner's investment firm allocated $200 million to Mosaic, a solar financing company benefiting from the IRA's tax credit.
Other firms with ties to Trump, including Continental Resources (NYSE:CLR) and Cantor Fitzgerald, have also made substantial investments in clean energy technologies, leveraging the tax breaks provided by the IRA.
Tesla, too, has benefited significantly from the IRA, despite CEO Elon Musk's previous criticisms of government subsidies. The company acknowledged the policy as a substantial boost to its mission. These developments underscore the ongoing influence of the IRA on investments and the political landscape, particularly as the upcoming election looms.
InvestingPro Insights
Tesla's recent performance and Stifel's upgraded price target align with several key metrics and insights from InvestingPro. The company's market capitalization stands at an impressive $836.16 billion, reflecting its dominant position in the electric vehicle market. Tesla's revenue for the last twelve months as of Q3 2024 reached $97.15 billion, with a quarterly revenue growth of 7.85% in Q3 2024, supporting Stifel's optimistic outlook on the company's growth trajectory.
InvestingPro Tips highlight that Tesla holds more cash than debt on its balance sheet, which provides financial flexibility for future investments and expansion plans. This solid financial footing is crucial as the company prepares to launch a lower-priced vehicle and expand its FSD capabilities, as mentioned in the article.
Moreover, 17 analysts have revised their earnings upwards for the upcoming period, aligning with Stifel's positive sentiment. Tesla's strong return over the last three months, with a 18.27% price total return, and its trading near its 52-week high (96.12% of the high) further underscore the market's confidence in the company's prospects.
For investors seeking more comprehensive analysis, InvestingPro offers 21 additional tips for Tesla, providing a deeper understanding of the company's financial health and market position.
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