Tesla's Robotaxi Ambitions Drive Stock Target Revisions Amid Mixed Q3 Performance

RBC lifts Tesla stock price target on Robotaxi business potential By Investing.com

RBC Capital set a higher price target for Tesla (NASDAQ:TSLA) shares Tuesday, raising it to $236 from the previous $224, while maintaining an Outperform rating on the electric vehicle manufacturer. The adjustment comes in anticipation of Tesla's Robotaxi day, an event that the firm believes is significant due to the business potential it unveils. "For the first time, it will highlight a business that represents $153B of Revenue for Tesla, 63% of our valuation," said the analysts. The optimism around this service is rooted in the expectation that Robotaxis could generate a staggering $1.7 trillion in global revenues by the year 2040. The RBC Capital analyst pointed out that the Robotaxi market is expected to be competitive, with various players sharing the market space. This includes fleet operators, application providers, car manufacturers, and software developers. The firm underlines the importance of this market, noting that the revenues from Robotaxi services would likely come with much higher margins compared to traditional automotive revenues. In other recent news, Tesla has reported its third-quarter deliveries at approximately 462,000 units, closely matching the consensus estimate of 463,000. Expectations for the fourth quarter of 2024 are higher, given the previous year's sales of about 484,000 units in the same period. To stimulate demand amidst challenges, Tesla has initiated financing offers in the United States and China. The company is also preparing to issue $783 million in bonds secured by automotive leases to generate capital. Additionally, Tesla's stock price target was recently raised by HSBC (LON:HSBA) analyst Michael Tyndall to $124 from the previous $118. Tesla Inc. is set to develop four new versions of its in-house battery cells, designed to power a range of electric vehicles including the anticipated Cybertruck and a forthcoming robotaxi. The company aims to incorporate dry cathodes into Cybertruck batteries by mid-next year and plans to produce between 2,000 and 3,000 Cybertrucks weekly using this new technology. To complement RBC Capital's optimistic outlook on Tesla's Robotaxi potential, recent data from InvestingPro offers additional context on the company's current financial position. Tesla's market capitalization stands at an impressive $769.37 billion, reflecting its dominant position in the electric vehicle market and investor confidence in its future prospects, including the Robotaxi initiative. An InvestingPro Tip highlights that Tesla "holds more cash than debt on its balance sheet," which could provide the company with the financial flexibility needed to invest in and develop its Robotaxi technology. This strong cash position aligns with the potential for high capital expenditures typically associated with cutting-edge automotive and AI developments. However, it's worth noting that Tesla's P/E ratio is currently at 62.26, which an InvestingPro Tip describes as "trading at a high earnings multiple." This valuation suggests that investors are pricing in significant future growth, potentially including the success of the Robotaxi business that RBC Capital has emphasized. For investors seeking a more comprehensive analysis, InvestingPro offers 21 additional tips on Tesla, providing a broader perspective on the company's financial health and market position as it ventures into the Robotaxi market.

Tesla stock price target raised by HSBC By Investing.com

HSBC (LON:HSBA) analyst Michael Tyndall adjusted the price target for Tesla (NASDAQ:TSLA) shares to $124, up from the previous $118, while maintaining a Reduce rating on the stock. The revision follows Tesla's third-quarter delivery report, which showed the company delivered 463,000 vehicles, marking a 6% increase year-over-year and a 4% rise quarter-over-quarter. These figures aligned with consensus estimates but were 10% higher than HSBC's projections. Tesla's energy storage deployments, however, did not meet expectations, achieving 6.9 gigawatt-hours in the quarter. This represented a significant 73% increase from the previous year but a 27% decline from the previous quarter, falling 23% short of the consensus and 25% below HSBC's forecast. According to company management, energy storage deployments can be uneven over time. To align with the consensus outlook for 2024, Tesla would need to grow its deliveries by approximately 1% year-over-year in the fourth quarter of 2024. With third-quarter production only 1.5% higher than deliveries, it appears that Tesla's management is anticipating modest growth in the final quarter as well. The upcoming Robotaxi event is expected to be a focal point in the short term. Although details remain sparse, the event is rumored to be hosted in Los Angeles, potentially at Warner Bros studios. Industry observers are anticipating the event to generate significant attention and possibly include a few surprises. Key questions that need addressing include the level of autonomy of the Robotaxis, the amount of data on miles driven autonomously, regulatory approval challenges, and the timeline for commercial availability. Tesla is not alone in the autonomous vehicle space, with competitors such as Waymo already operating over 100,000 rides per week in the United States and Baidu (NASDAQ:BIDU) having completed 7 million rides in China. The market is watching to see how Tesla's offerings will compare. HSBC has expressed concerns over the timing of the delivery and commercialization of Tesla's pre-revenue opportunities, such as Dojo, Full Self-Driving (FSD), Optimus, AI Compute, and other projects. The firm suggests that the market's valuation of Tesla may be optimistic, anticipating a quicker timeline to market than what HSBC believes is realistic. The stock has shown a pattern of rallying ahead of major events and then declining as details emerge, a trend HSBC attributes to the disparity between the excitement of Tesla's announcements and the company's fundamental performance. In other recent news, Tesla Inc. is set to develop new battery cells for its Cybertruck and upcoming robotaxi by 2026. However, the development of these 4680 battery cells has faced challenges, with high loss rates during test production. Tesla plans to incorporate this technology into Cybertruck batteries by mid-next year, with the aim to produce between 2,000 and 3,000 Cybertrucks weekly. In the analyst sphere, Bernstein SocGen Group maintained its Underperform rating on Tesla, highlighting a shift in investor attention to Tesla's robotaxi. Despite this shift, the firm expressed doubts about Tesla's capacity to outpace competitors in the autonomous driving market. Meanwhile, Goldman Sachs (NYSE:GS) reaffirmed its Neutral stance on Tesla, focusing on the company's third-quarter vehicle deliveries and production numbers. Tesla has also discontinued its most affordable Model 3 variant in the U.S., now offering the Model 3 Long Range Rear-Wheel Drive as its entry-level electric vehicle. This change follows increased tariffs on Chinese goods, affecting the previously offered model's battery cells. Truist Securities adjusted its price target for Tesla to $236, maintaining a Hold rating on the electric vehicle manufacturer's shares. To complement HSBC's analysis, recent data from InvestingPro offers additional perspective on Tesla's financial position and market performance. As of the latest available data, Tesla boasts a substantial market capitalization of $779.56 billion, reflecting its dominant position in the electric vehicle market. InvestingPro Tips highlight that Tesla "holds more cash than debt on its balance sheet" and that "cash flows can sufficiently cover interest payments." These factors suggest a strong financial foundation, which could be crucial as the company navigates the capital-intensive development of new technologies like Robotaxis and autonomous driving systems. However, the company's valuation metrics present a mixed picture. Tesla is currently trading at a P/E ratio of 62.59, which InvestingPro characterizes as "trading at a high earnings multiple." This high valuation could align with HSBC's concerns about the market's optimistic expectations for Tesla's pre-revenue opportunities. It's worth noting that Tesla has shown a "strong return over the last month" with an 18.24% price increase, and a significant 47.89% gain over the past six months. These performance metrics may reflect the market's anticipation of upcoming events like the Robotaxi announcement. For investors seeking a more comprehensive analysis, InvestingPro offers 19 additional tips on Tesla, providing a deeper understanding of the company's financial health and market position.

Tesla stock maintains underperform rating with $120 target By Investing.com

On Wednesday, Bernstein SocGen Group maintained its Underperform rating on Tesla shares (NASDAQ:TSLA) with a steady price target of $120.00. The firm expressed skepticism about Tesla's growth prospects, particularly in terms of unit sales for the current year. Despite the potential for lower prices and favorable financing, Bernstein SocGen Group highlighted that achieving positive unit growth would still fall significantly short of Tesla's initial goal of maintaining over 50% unit growth annually. The firm pointed out that earnings per share (EPS) estimates for the fiscal year 2024 have dropped from nearly $7 in late 2022 to approximately $2. This shift in expectations comes as investor attention has turned towards Tesla's ambitions in the robotaxi market. Tesla's stock experienced a 34% decrease from January 1 to April 5; however, it has since risen by 56% following the announcement of the upcoming Robo-Taxi day. Bernstein SocGen Group remains unconvinced that Tesla will outpace competitors in delivering Level 4 autonomous robotaxis and ultimately dominate the autonomy and robotaxi space. Looking ahead to 2025, the firm anticipates challenges for Tesla, not expecting the arrival of a lower-cost Model 2 in significant volumes until 2026. Furthermore, the new "lower cost" models set to begin production in the first half of 2025 are expected to be modest revisions that may not substantially alter Tesla's demand dynamics. For the fiscal year 2025, Bernstein SocGen Group forecasts Tesla will produce 1.97 million units and achieve an EPS of $2.62. This projection is roughly 60% lower than what would have been anticipated if Tesla had maintained its targeted compound annual growth rate (CAGR) of 50% set in 2021. The firm's analysis indicates cautious expectations for Tesla's performance in the near future, aligning with its reiterated Underperform rating and unchanged price target. In other recent news, Tesla's third-quarter delivery numbers showed a marginal increase of 0.2% over the consensus, reaching a total of 462.9k units. Despite this, the figures were below some expectations, which were closer to 470k. TD Cowen, maintaining a Hold rating, revised its estimates for Tesla, adopting a cautious stance on volume and average selling price. On the other hand, Stifel maintained a Buy rating, aligning closely with the delivery results. Tesla's energy storage segment deployed 6.9 GWh, which met market predictions but marked a decline from the previous quarter's 9.4 GWh. Evercore projects earnings per share for Tesla in the range of 57 to 59 cents. The company has also been preparing for its Robotaxi event, expected to provide insights into Tesla's advancements in autonomous driving technology. Barclays (LON:BARC) maintained an Equalweight rating on Tesla shares, attributing the delivery miss to weaker performance in the Model S, Model X, and Cybertruck lines. Tesla also recently won a dismissal of a shareholder lawsuit alleging fraud over self-driving technology claims and increased its market share in Sweden to 8.5% in 2024, up from 7.8% the previous year. Wedbush reiterated its Outperform rating on Tesla shares, emphasizing the potential value of Tesla's advancements in artificial intelligence and Full Self-Driving technology. Recent InvestingPro data provides additional context to Bernstein SocGen Group's analysis of Tesla (NASDAQ:TSLA). As of the latest quarter, Tesla's P/E ratio stands at 63.97, indicating that the stock is trading at a high earnings multiple. This aligns with one of the InvestingPro Tips, which notes that Tesla is "Trading at a high P/E ratio relative to near-term earnings growth." The company's revenue for the last twelve months reached $95.32 billion, with a modest growth of 1.37%. This slow growth rate supports Bernstein SocGen Group's concerns about Tesla's ability to meet its ambitious growth targets. Additionally, the InvestingPro Tip highlighting that "Net income is expected to drop this year" further corroborates the firm's cautious outlook. Despite these challenges, Tesla maintains a strong financial position. An InvestingPro Tip reveals that the company "Holds more cash than debt on its balance sheet," which could provide flexibility as it navigates the competitive landscape of the automotive and autonomous vehicle markets. For investors seeking a more comprehensive analysis, InvestingPro offers 19 additional tips on Tesla, providing a deeper understanding of the company's financial health and market position.

Stifel maintains Tesla buy stock rating amid delivery data By Investing.com

On Wednesday, Stifel maintained its Buy rating on Tesla (NASDAQ:TSLA) shares with a price target of $265. The firm's stance comes after evaluating Tesla's third-quarter production and delivery figures, which Stifel views as a slight negative for the stock. The electric vehicle manufacturer reported a total of 462,890 deliveries in the third quarter of 2024, a number that closely aligns with Stifel's projection of 465,169 and the consensus estimate of 463,310. Despite some market anticipation for higher figures, the delivery count was nearly on target. The breakdown of deliveries revealed that Tesla's Model 3/Y series slightly surpassed both Stifel's forecast and the consensus with 439,975 units delivered. However, the combined deliveries of Tesla's other models, including the S, X, and Cybertruck, did not meet expectations. In the energy storage segment, Tesla's deployment of 6.9 GWh was deemed to align with market predictions. Stifel's commentary highlighted that the delivery results, although in line with forecasts, could be considered a small setback for Tesla's stock value in the short term. This sentiment is partly because there were hopes for a modest delivery beat, especially after strong performance numbers from China in August. Tesla's third-quarter production totalled 469,796 vehicles, which was 8.5% below Stifel's estimate, yet it marked a 14.4% sequential increase from the previous quarter. The firm anticipates that the upcoming earnings report on October 23 will provide further insight into Tesla's financial health, particularly regarding the automotive sales gross profit per delivery, excluding leased vehicles. This detail is expected to clarify the impact of pricing strategies and potential discounts on the company's margins. In other recent news, Tesla Inc. experienced a slight dip in its third-quarter vehicle deliveries, totaling 463,000 units, falling short of heightened market expectations. Analysts from Evercore highlighted this shortfall as an "expectational disappointment." Despite this, the company's production figures remained robust at 470,000 units for the same period. Evercore projects third-quarter earnings per share (EPS) for Tesla in the range of 57 to 59 cents, with an expected gross margin (GM) of around 15%. In addition, Tesla's energy production saw a decrease, generating 6.9 GWh in the third quarter, a drop from 9.4 GWh in the second quarter. Barclays (LON:BARC) maintained its Equalweight rating on Tesla shares, attributing the delivery miss to weaker performance in the Model S, Model X, and Cybertruck lines. Conversely, Wedbush reiterated its Outperform rating on Tesla shares, emphasizing the potential value of Tesla's advancements in artificial intelligence (AI) and Full Self-Driving (FSD) technology. In other company news, Tesla recently won a dismissal of a shareholder lawsuit alleging fraud over self-driving technology claims. Additionally, despite ongoing labor disputes, Tesla has seen an increase in its market share in Sweden, reaching 8.5% in 2024, up from 7.8% the previous year. These are the recent developments in Tesla's journey. To complement Stifel's analysis of Tesla's recent performance, InvestingPro data offers additional context for investors. Tesla's market capitalization stands at an impressive $784.54 billion, reflecting its dominant position in the electric vehicle market. The company's P/E ratio of 62.62 indicates that investors are pricing in high growth expectations, aligning with Stifel's Buy rating despite the slight delivery miss. InvestingPro Tips highlight that Tesla "holds more cash than debt on its balance sheet" and "cash flows can sufficiently cover interest payments," suggesting a strong financial position that could support future growth initiatives and weather potential market volatility. This financial stability is particularly relevant given the production challenges and competitive pressures in the EV industry. However, investors should note that Tesla is "trading at a high earnings multiple" and has a "high P/E ratio relative to near-term earnings growth." This valuation premium underscores the importance of the upcoming earnings report in justifying the current stock price. For those seeking a deeper dive into Tesla's financials and market position, InvestingPro offers 19 additional tips, providing a comprehensive view of the company's strengths and potential risks.