HomeMarket News The Unwavering Tesla Bull: Balancing Stock Slumps with Long-Term Perspective

The Unwavering Tesla Bull: Balancing Stock Slumps with Long-Term Perspective

Actionable Trade Ideas

always free

Elon Musk Tesla CEO 9

Long-term Vision Amid Short-term Setbacks

RBC Capital Markets analyst Tom Narayan maintains optimism about EV giant Tesla Inc TSLA despite a year of poor stock performance.

The Next Big Boost

Analyst Take: Narayan sees Tesla poised between waves, waiting for the affordable car priced below $30,000 to kickstart the next surge. This vehicle is slated for production in the second half of 2025.

โ€œElon doesnโ€™t think about things on a day-to-day or month-to-month basis; Heโ€™s looking at things from a years, if not decades, perspective. Eventually, weโ€™ll get this catalyst with the next-gen vehicle,โ€ Narayan explained.

Diverse Valuation Strategy

RBC Capital Markets maintains a โ€˜buyโ€™ rating on Tesla with a $298 price target, with only 10% of Narayanโ€™s valuation model based on Teslaโ€™s core auto business.

Narayan emphasized the significance of Teslaโ€™s autonomous driving efforts and energy storage business in the remaining 90% of the valuation, recognizing the potential in these often overlooked areas.

Potent Energy Surge

Tesla experienced a remarkable surge in energy storage deployments last year, with a 54% increase in energy generation and storage business revenue totaling $6 billion. Profits nearly quadrupled as a result.

Autonomous Driving: Fueling Market Value

The impending approval of Teslaโ€™s Full Self-Driving (FSD) software by regulators is anticipated to exponentially boost revenue, with Elon Musk confident that revenue will surge once FSD receives the green light.

Although Teslaโ€™s FSD software is currently in the beta phase and necessitates driver supervision, the company continues to enhance its capabilities through software updates.

Diverging Views and Market Reactions

Contrary to Narayanโ€™s enthusiasm, Evercore analysts caution that Tesla is more of a โ€œ2027 story,โ€ casting doubt on the feasibility of the projected cheaper Tesla vehicle reaching a million units by 2026.

Additionally, Wells Fargo downgraded Tesla to โ€˜underweightโ€™ following concerns about subpar deliveries and price reductions, slashing the price target from $200 to $125.

Stock Performance Snapshot

Tesla shares closed at $162.5 on Thursday, marking a 4.12% decline. Year-to-date, the stock has dropped by nearly 34.6%, according to data from Benzinga Pro.

For more updates on the future of mobility, refer to Benzingaโ€™s comprehensive coverage.

Find out more about Ford CEO Jim Farleyโ€™s unique journey securing a deal with Tesla here.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.