On Monday, CFRA maintained its Buy rating on Tesla (NASDAQ:TSLA), currently trading at $387.91, and increased the stock's 12-month price target to $450 from the previous $375. The adjustment reflects the firm's optimism about Tesla's future, particularly in the area of autonomous driving technology. According to InvestingPro data, Tesla commands a significant market capitalization of $1.24 trillion, though it trades at a premium P/E ratio of 96x.
The stock has experienced significant growth following the U.S. Presidential election, with InvestingPro data showing a remarkable 9% gain in the past week alone and a 119% surge over the last six months. Analysts at CFRA believe this upward trend will continue.
They attribute this momentum to Tesla's advancements in autonomous driving, which are seen as moving closer to realization. The recent Full Self-Driving (FSD) version 13 release by Tesla, showcasing new capabilities such as autonomous parking at a route's end and initiating FSD from a parked state, supports CFRA's positive outlook.
CFRA's analysis suggests that these continuous enhancements in Tesla's autonomous driving technology could accelerate the process of obtaining a federal autonomous driving permit under the new administration. The transition team for President-elect Trump has indicated that establishing a federal framework for fully autonomous vehicles is a high priority for the Transportation Department.
Despite potential challenges that may affect Tesla's sales growth in 2025, such as an electric vehicle inventory surplus and lower oil prices, CFRA believes that the developments in autonomous driving technology are a more significant factor influencing the company's stock value.
The firm's confidence in Tesla's trajectory is reflected in the new price target, which is based on a 2026 price-to-earnings ratio of 120 times. InvestingPro analysis indicates Tesla maintains a GOOD financial health score, with analyst targets ranging from $116 to $421. Get access to 23 additional ProTips and comprehensive financial analysis with an InvestingPro subscription.
In other recent news, Elon Musk's artificial intelligence venture, xAI, secured $6 billion in its latest funding round. The company also announced plans to expand its "Colossus" supercomputer facility, aiming to increase its capacity ten-fold to over one million Graphics Processing Units (GPUs). Meanwhile, Tesla, another Musk-led company, experienced a record-breaking month in October with global passenger xEV sales hitting a new all-time high of 1.76 million units sold, as reported by Bernstein.
On the analyst front, Guggenheim maintained a Sell rating on Tesla's stock, citing risks to its future growth targets. In contrast, BofA Securities maintained a Buy rating, highlighting the potential of Tesla's Optimus robot to drive the next wave of automation. However, Bernstein maintained its Underperform rating on Tesla, pointing out considerable risks associated with the company's strategic focus on developing a dedicated 'Cybercab'.
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