The new price target represents a 45% upside to the stock’s closing price on Wednesday and follows the EV maker’s successful pilot launch of its robotaxis in Austin over the weekend.
Benchmark analyst Mickey Legg on Thursday raised the firm's price target for EV giant Tesla Inc.’s (TSLA) shares to $475 from $350 while keeping a ‘Buy’ rating on the shares.
The new price target represents a 45% upside to the stock’s closing price on Wednesday and follows the EV maker’s successful pilot launch of its robotaxis in Austin over the weekend.
While limited, the firm believes the rollout demonstrates "a controlled and safety-first approach." According to the analyst, winning over regulators and public opinion is "paramount and will allow a rapid scale up if achieved."
The stock reached a high of $488 in December and has declined 33% to current levels, adds the analyst, who said the firm's thesis "remains intact." He further noted that Tesla remains a Benchmark Top Pick for 2025.
Tesla deployed only about 10 Model Y vehicles as robotaxis on Sunday within a geofenced area of Austin. However, Musk has previously expressed optimism for the company adding more vehicles and cities over time.
According to Legg, Tesla has a better value proposition than Waymo, the Alphabet Inc. (GOOG, GOOGL) unit, which serves as the company’s key competition in the robotaxi segment. According to a report from CNBC, Legg believes Tesla’s approach is more cost-effective and scalable owing to its focus on cameras to study vehicle surroundings over sensors. This could beat out Waymo’s first-mover advantage, Legg opined.
“The average cost of a Waymo is over six-figures, well over the cost to produce a Model Y,” the analyst wrote, while adding that Tesla’s balance sheet looks healthy and balanced with its free cash flow providing “plenty of fresh powder” to fund growth opportunities.
Tesla is expected to report its second-quarter vehicle deliveries early next month, and several analysts have warned of a year-on-year drop.
RBC Capital on Thursday estimated Tesla will deliver 366,000 vehicles in Q2, below the Visible Alpha consensus of 406,000 units and Factset consensus of 390,000. RBC has an ‘Outperform’ rating and $307 price target on Tesla shares.
However, according to Legg, analysts have already priced in the delivery number drop, and he remains optimistic for growth in the form of robotaxis, model refreshes, and Optimus robots in the long term.
On Stocktwits, retail sentiment around Tesla is trending in the ‘bullish’ territory.
TSLA stock is down by about 19% this year but up by about 66% over the past 12 months.
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