On Friday, Canaccord Genuity analysts increased their price target on Tesla stock (NASDAQ:TSLA) to $404 from the previous target of $298, while reaffirming their Buy rating.
The revised target reflects an adjustment to approximately 40 times the projected 2027 non-GAAP earnings per share (EPS) of $10.11, up from the earlier multiple of around 34 times the forecasted 2026 EPS.
The analysts remain confident in Tesla's prospects despite recent delivery figures falling short of expectations. They justify the higher multiple by comparing Tesla to a peer group of large-cap technology stocks, which includes industry giants such as Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), and Nvidia (NASDAQ:NVDA). This cohort trades at a median of around 23 times their estimated 2027 EPS, according to data from FactSet. However, the combined revenue growth rate of these companies is estimated to be about half of Tesla's growth rate for the period from 2025 to 2027.
Canaccord Genuity's analysts believe that Tesla's valuation is warranted due to the company's potential for significant growth opportunities in the coming years. They highlighted electric vehicles (EVs), autonomy and artificial intelligence (AI), energy storage, and robotics as key areas where Tesla is poised to make substantial advancements.
While acknowledging the limited upside the new price target suggests, the analysts cited near-term market volatility as a factor in their valuation. They expressed the view that the current target is appropriate given the circumstances, signaling a cautious optimism for Tesla's stock performance in the face of market fluctuations.
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