Tesla Inc (TSLA) shares saw a boost on Wednesday following a bullish analyst initiation from Stifel. Analyst Stephen Gengaro gave Tesla a Buy rating with a price target of $265, citing strong potential for multi-year growth.
Gengaro believes that Tesla’s revamped Model 3 and upcoming Model Y refresh will drive sales in the short term. He also anticipates high demand for Tesla’s next-gen Model 2 vehicle. The analyst is optimistic about Tesla’s AI-based Full Self-Driving (FSD) initiative, which he believes will bring significant value through FSD sales and potential licensing agreements.
Despite missing estimates last quarter, Tesla’s CEO Elon Musk remains confident in the company’s future vision around AI, Full Self-Driving, and robotaxis. Gengaro acknowledges near-term risks for Tesla, particularly around delivery numbers, but he believes that downward estimate revisions are nearing completion.
Looking ahead, Gengaro sees potential for Tesla’s valuation to increase, driven by the company’s strong balance sheet and robust free cash flow. His $265 price target factors in projected 2025 EBITDA estimates, Full Self-Driving, and robotaxi upside, as well as potential from Tesla’s supercharger network, energy products, and autonomous robots.
Tesla is set to report earnings for the second quarter in mid-July, with estimates predicting earnings of 60 cents per share and revenue of $24.19 billion. As of the time of publication, Tesla shares were up 2.87% at $192.73.
Investors are keeping a close eye on Tesla’s upcoming earnings report and the company’s growth potential in the evolving electric vehicle market.