Tesla Inc shares are trading higher after an analyst maintained a Buy rating and raised the price target on the stock to $508. The stock is currently trading at elevated levels.
What’s Behind the Surge
The analyst pointed to advancements in Robotaxi and full self-driving (FSD) technology as key factors in the decision. These technologies are considered essential to value creation.
- Robotaxi development is ongoing in Austin and the Bay Area
- Management plans to expand to 8-10 major cities by the end of 2025 without safety drivers
- Plans for robotaxis in select areas of Austin are expected to be implemented by the end of 2025, with further expansion into Nevada, Florida, and Arizona
FSD Technology Advancements
FSD version 14 is performing well, with management planning to add “reasoning capabilities” in versions 14.3 or 14.4.
Challenges Ahead
Despite strong third-quarter sales, the analyst expects some challenges for auto sales following the expiration of the US electric vehicle tax credit. However, Tesla’s release of the Model Y standard and Model 3 standard, which retail for $39,990 and $36,990 respectively, may lessen the impact.
Optimus Robot
CEO Elon Musk is optimistic about the Optimus robot, expecting Optimus 3 to be “ready to show off” in 2026. He plans to have a production line that can make one million units, with plans to eventually scale to 10 million units by the end of 2026.
Analyst Projections
The analyst raised EBITDA projections for 2025 and 2026 to $14.859 billion and $19.489 billion, respectively. The $508 price target is based on:
- 20-25x projected 2026 EBITDA ($134 per share)
- 75% of estimated FSD value ($186 per share)
- 75% of estimated Robotaxis upside ($158 per share)
- 50% of estimated Optimus upside ($29 per share)
TSLA Analyst Ratings
Tesla maintains a consensus Buy rating from Wall Street analysts, with a consensus price target of $378.37. The most bullish outlook comes from Wedbush, with a $600 price target, while the most bearish view comes from GLJ Research, with a $19.05 price target.
Notable Ratings
Other notable ratings include:
- Bank of America Securities: Neutral rating with a $471 price target
- Canaccord Genuity: Buy rating with a $482 target
- Cantor Fitzgerald: Overweight rating with a $510 price target
TSLA Price Action
Tesla shares were up 0.65% at $406.98 at the time of publication on Monday.