A recent analysis of Tesla Inc. suggests that the company’s upcoming revamped and new vehicle models, along with the potential of Full Self-Driving licensing, will drive sales growth. This optimistic outlook comes despite the company’s recent fourth-quarter delivery miss.
The Analyst’s Take
Reiteration of Buy Rating and Price Target Increase
Tesla analyst Stephen Gengaro has reiterated a Buy rating on the company and raised the price target from $441 to $492. This move indicates confidence in Tesla’s long-term growth potential, driven by several key factors:
- The rollout of the “Model 2”, anticipated to boost sales due to its lower price point, making Tesla vehicles more accessible to a wider range of consumers.
- The introduction of revamped models, such as the Model 3 and a refreshed Model Y, expected to further drive vehicle sales.
- The potential for Tesla’s Full Self-Driving and artificial intelligence initiatives to generate significant value and revenue.
Growth Outlook
Robust Multi-Year Growth Anticipated
Gengaro believes that Tesla is well-positioned to deliver robust multi-year growth from 2025 to 2027 and beyond. This outlook is supported by the company’s strategic initiatives and the anticipated strong demand for its upcoming models.
Competitive Advantage
Electric Vehicle Tax Credits and Full Self-Driving Initiatives
The potential removal of $7,500 in electric vehicle tax credits under the new White House administration is seen as an advantage for Tesla over its competitors. Additionally, the company’s Full Self-Driving initiative is expected to generate significant value through sales, possible licensing agreements, and its role in longer-term Cybercab initiatives.
Price Action and Upcoming Financial Results
Tesla Stock Performance and Fourth-Quarter Financial Results
Tesla’s stock was up 0.2% to $411.05 on Monday, with a 52-week trading range of $138.80 to $488.54. The company is set to report its fourth-quarter financial results after the market closes on January 29. Despite the recent delivery miss and first annual sales decline, Tesla’s stock has risen 71% over the last year.
Conclusion
Strong Long-Term Growth Prospects
In conclusion, Tesla’s future looks bright, with a strong growth outlook driven by its upcoming models, Full Self-Driving initiatives, and strategic advantages. While the company faces short-term challenges, its long-term prospects remain promising, making it an attractive investment opportunity.