Deutsche Bank analyst Edison Yu initiated coverage of Tesla (TSLA) stock with a Buy rating, calling it his “Top Pick” among autos. Yu assigned TSLA stock a price target of $295, implying an attractive 29.3% upside potential from current levels. The analyst believes that Tesla is more than just an EV (electric vehicle) player. He sees Tesla as a booming technology platform that is establishing itself in several tech verticals, thus commanding a unique valuation framework.
Reasons for Analyst’s Bullish View on Tesla
Yu acknowledged that Tesla already has a big share of the BEV (battery electric vehicle) market in terms of scale and cost. Plus, it has earned a loyal brand following. Although the margin for automotive players remains subdued, Yu says this is temporary, especially considering the launch of new models and updates.
On the longer-term horizon, Yu views Tesla as an emerging leader in autonomous driving with its robotaxis and humanoid business with its Optimus robot. He says these are the most clear and attractive applications of end-to-end AI (artificial intelligence). Further, he noted that Tesla’s energy storage business is already flourishing, with over $13 billion in sales expected in 2025.
To sum it up, Yu believes that Tesla is in a “league of its own” and is poised for substantial growth ahead.
Insights from TipRanks’ Bulls Say, Bears Say Tool
Interestingly, Wall Street analysts have very differing views on TSLA stock owing to the current challenges and opportunities facing the company. According to TipRanks’ Bulls Say, Bears Say tool, some analysts are highly encouraged by Tesla’s growing revenues from the energy storage business. Bulls also highlighted the solid Q2 revenue and Tesla’s market leadership.
On the other hand, Bears are concerned about declining brand desirability, slowing demand for EVs, and gross margin pressures.
Is Tesla a Buy, Sell, or Hold?
Given analysts’ conflicting views, TSLA stock has a Hold consensus rating. This is based on ten Buys, 14 Holds, and seven Sell ratings on TipRanks. The average Tesla price target of $211.46 implies 7.3% downside potential from current levels. Year-to-date, TSLA shares have lost 8.2% of their value.
