Charged: Wall Street analysts bullish on Tesla into 2025

Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.

From the hotly-debated high-flier Tesla (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with “Charged,” a weekly recap of the top stories and expert calls in the sector.

SAFE HAVENS: Deutsche Bank raised the firm’s price target on Tesla to $370 from $295, keeping a Buy rating on the shares. The firm believes investors will seek “safe havens” in autos for 2025, where margin expansion and outgrowth are “relatively shielded from price/mix and environment-driven headwinds.” In this context, Deutsche recommends select suppliers and would generally stay on the side-lines from traditional car makers. It continues to like Tesla into 2025.

WELL-POSITIONED TO GROW: BofA raised the firm’s price target on Buy-rated Tesla to $400 from $350. After having visited Tesla’s Texas gigafactory for a meeting with IR, a factory tour and a ride and drive session, the firm tells investors that the trip gave it increased confidence that Tesla is well-positioned to grow in 2025 and beyond with its core EV business and launch of its robotaxi offering, as well as longer-term from its investments in Optimus. BofA also sees opportunities for Tesla to improve margins, which today are mainly driven by hardware, but will shift more to margin-accretive software with growth in Full Self Driving.

NOT ON TRACK TO GROW DELIVERIES: Goldman Sachs believes data points intra-quarter on Tesla’s deliveries for key regions U.S., Europe, and China show mixed demand trends. Tesla is not currently tracking to meet its objective to grow vehicle deliveries in 2024, which would require 515,000 or more units in Q4, the firm tells investors in a research note. However, Goldman expects Tesla to increasingly use incentives to try to achieve this volume target. Part of Tesla’s motivation for using incentives to try to grow could be an effort to reduce Model Y inventory ahead of the launch of a refreshed version that media reports suggest could occur in early 2025, contends the firm. Goldman lowered its Q4 deliveries estimate to 510,000 units from 515,000, which compares to the consensus estimate of 515,000. The firm keeps a Neutral rating on Tesla with a $250 price target.

PAY PACKAGE: A Delaware judge has reaffirmed the rejection of Elon Musk’s record-breaking Tesla compensation package, despite a June 13 shareholder vote supporting its reinstatement, Jef Feeley of Bloomberg reported. Delaware Chancery Court Judge Kathaleen St. J. McCormick upheld her January ruling, which found that Tesla’s board was overly influenced by Musk when it approved the plan in 2018.

Wedbush says that in “another Twilight Zone” legal move from Chancellor McCormick of the Delaware Court of Chancery yet again blocked Elon Musk’s $56B pay package that has been approved by Tesla shareholders now two times. The firm continues to believe “Tesla and Musk will fight this tooth and nail all the way to the Supreme Court in Delaware and then potentially to the Federal system as this remains “a frustrating headache for Tesla, Musk and its shareholders.” Wedbush also believes this case could be the catalyst for more public companies to leave the state of Delaware for their corporation status. “Musk is Tesla and Tesla is Musk,” the firm says, “One way or another the Board is getting Musk his pay package to secure Musk will be CEO of Tesla at least through 2030.” Wedbush expects Tesla will ultimately win this fight at the Supreme Court level. The firm has an Outperform rating on the shares with a price target of $400.

Click here to check out Tesla’s recent Media Buzz Sentiment as measured by TipRanks.

BULLISH ON RIVIAN: Benchmark initiated coverage of Rivian Automotive with a Buy rating and $18 price target, telling investors that Rivian is “well positioned to gain significant share of a massive market opportunity in the coming decade.” Domestic electric vehicle production is expected to improve in 2025 after a pause this year and further accelerate in 2026-27 as average selling prices decline and the charging infrastructure is built out. Rivian appears “particularly well-positioned” among the EV newcomers with contracts with Amazon (AMZN) and Volkswagen (VWAGY), highly rated vehicles, expected positive gross profit in the current quarter and sufficient financial liquidity, the firm added.

SELL XPENG: UBS downgraded XPeng (XPEV) to Sell from Neutral with a price target of $8.80, up from $8.20. The share price has risen over 50% since September as the newly launched MONA MO3 and P7+ reported higher-than-expected early orders and deliveries, notes the firm, which argues that new launch momentum and EREV potential are now “overly priced in.”