Tesla’s (NASDAQ:TSLA) Q4 deliveries were disappointing, missing Wall Street expectations, while the company also fell short of its annual delivery target. Tesla had projected “slight growth” in 2024, but instead, its deliveries declined by 1% compared to 2023.
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That put a bit of a dent – albeit, temporary – in the supercharged sentiment that has developed around the stock since Trump’s November election win. Since then, shares have a been on a big run, having gained 63%, with investors viewing CEO Elon Musk’s involvement in the new regime and his potential to influence the regulatory backdrop as extremely positive for the Tesla story.
However, that take, says Canaccord analyst George Gianarikas is “nothing more than cynicism.”
“We’re not naïve; we just don’t think the world is that simple – particularly considering President-elect Trump’s seemingly negative view of the Inflation Reduction Act, EV’s, and the renewables complex broadly,” Gianarikas explained. “The performance differential between Tesla’s stock and its Sustainability-related peers (ex-AVs) post-election was eye-opening.”
So, the combination of undeserved abundant recent gains and a delivery miss have prompted some soul searching from the analyst regarding his Tesla stance. Is it time for the Tesla bull to take a more downbeat view of the EV maker’s prospects? Au contraire! Gianarikas concludes that there are just too many positives taking place for him to look at Tesla through a bearish lens.
These include Tesla’s promise of new vehicle launches in 2025, which signals accelerating growth, with anticipated year-over-year volume increases of 20–30% “Tough to be too negative on an accelerating growth story,” says Gianarikas, “and Tesla should be one of those in 2025.”
Meanwhile, auto gross margins are stabilizing, with costs per vehicle hitting historic lows in 3Q24, and Gianarikas expecting margins to improve in 2025. Then there are the advances being made in Tesla’s FSD (full self-driving) technology. While not flawless, users have been very enthusiastic about FSD v13.2, potentially resulting in growing adoption and offering a boost to profitability. Additionally, demand for energy storage remains robust, with an “investment supercycle” in energy infrastructure in the cards. Finally, Tesla’s leadership in robotics positions it to capitalize on this fast-growing sector, with Gianarikas viewing 2025 as “the year of the robot.”
Ultimately, all the above prompts Gianarikas to rate Tesla shares a Buy, while his price target goes from $298 to $404. That said, the new figure implies shares will stay rangebound for the time being. (To watch Gianarikas’ track record, click here)
Other Wall Street analysts take a more cautious stance, with an average price target of $311.89 suggesting a potential 24% downside. Tesla stock holds a consensus Hold (i.e. Neutral) rating, derived from 14 Buys, 11 Holds, and 9 Sells. (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.
