Roth MKM analyst Craig Irwin has significantly upgraded Tesla Inc.’s price target by 347%, from $85 to $380, and changed the rating to a “buy” from “neutral”. This change in opinion is notable, as Irwin has been a long-time Tesla bear.
A Shift in Opinion
Irwin attributed his change in opinion to the potential benefits Tesla may gain from its CEO Elon Musk’s new association with President-elect Donald Trump. According to Irwin, this could lead to an acceleration of demand in the core U.S. market, as conservatives who might not have considered EVs in the past may now be inclined to do so.
Key Takeaways from the Analyst’s Comments
- “This quarter is probably the last quarter of relative weakness; Now he (Elon) has got a new pool of buyers. Conservatives that might not have looked at EVs quite as closely in the past that allow an acceleration of demand in the core U.S. market.”
- “I don’t see very many negative catalysts… There are abundant positive catalysts… Bias is now to the upside, not the downside. The market cap may be huge… but they are doing big things.”
- Irwin is also optimistic about the contribution of the Cybercab to Tesla’s stock value, citing the importance of “incremental progress” and a tangible experience in driving value for the stock.
The Impact of Trump’s Presidency on Tesla
Musk actively campaigned for Trump in the swing state of Pennsylvania, and Trump named the billionaire to lead the Department of Government Efficiency. This newfound relationship has sparked optimism among investors, with hopes of easing restrictions on the development of technology aimed at vehicle autonomy and removal of EV-related subsidies that may harm rival smaller players.
The Outlook for Tesla’s Stock
Tesla shares rallied after Trump’s presidential win, and the stock has gained 44% year-to-date. With a consensus rating of “Buy” and an average price target of $339, the stock may be poised for further growth. However, the average price target implies a 5% downside from current levels.
Market Performance
- Tesla shares closed up 3.5% at $357.09 on Monday.