Tesla’s (NASDAQ:TSLA) 2024 was looking rather dire halfway through the year, but that changed completely as the year progressed. The big shift, of course, came with Trump’s election win, and with 2025 almost upon us, the stock is now showing year-to-date gains of 68%.
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A key driver of this post-election momentum has been down to the prospect of Elon Musk getting involved in the new administration’s affairs and how that could have a positive impact on Tesla. One point brought up regularly is that of a potentially lighter regulatory backdrop on all things autonomous.
This sentiment is echoed by Cantor analyst Andres Sheppard, who has grown “more bullish on Tesla’s Robotaxi segment.”
Sheppard highlights that Tesla stands to benefit significantly if the U.S. Department of Transportation establishes a regulatory framework for autonomous vehicles. Supporting this outlook, Tesla revealed at the ‘We, Robot’ event that it plans to roll out fully autonomous Models Y and 3 in 2025, starting in California and Texas.
Another factor behind Sheppard’s positivity is down to a recent update to the company’s autonomous software. Last week, Tesla rolled out FSD (full self-driving) version 13.2, introducing features like reverse driving and automated parking at the beginning and end of trips. Although the updated software has only been made available to a select group of customers so far, Sheppard notes that the feedback has been “quite positive,” moving Tesla a step closer to its Robotaxi launch.
Meanwhile, Tesla is aiming to launch FSD in both China and Europe in 1Q25 (pending regulatory approval) and Sheppard thinks this could serve as a “material catalyst.” In Q3, revenues from China and other regions represented 22% and 28% of Tesla’s total revenues, respectively. Moreover, Tesla could potentially license this tech to other OEMs in the future, creating an additional revenue stream.
While this all sounds like an endorsement from Sheppard, considering the big recent share gains, the analyst actually thinks now might not be the best time to get in.
“While we are bullish over the long-term,” said the analyst, “we don’t see this as a great entry point for new investors.”
To this end, Sheppard rates Tesla shares as Neutral. Although his price target moves from $255 to $365, the new figure suggests the shares are still overvalued by 14%. (To watch Sheppard’s track record, click here)
The Street’s average price target is even less forgiving; at $267.79, there’s a potential downside of ~36% from current levels. All told, the analyst consensus rates the stock a Hold based on 13 Hold, 12 Buy and 9 Sell recommendations. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
