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Evercore ISI raises Tesla price target following drop in shares

EditorRachael Rajan
Published 10/14/2024, 07:34 PM
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On Monday, Evercore ISI adjusted its price target for Tesla (NASDAQ:TSLA) shares, raising it to $195 from the previous target of $145, while maintaining an In Line rating.

The revision followed Tesla's recent product announcement event, which took place on Thursday evening and was streamed to over two million viewers. At the event, held at the Warner Brothers studio in Los Angeles, Tesla unveiled several new products, including the Cybercab, Robovan, and Optimus.

The presentation, which drew a live audience of more than 2,000 people, including sell-side analysts, investors, and enthusiasts, featured references to iconic science fiction films such as "Westworld," "I, Robot," "Metropolis," and "Back to the Future." Tesla CEO Elon Musk made bold promises about a future significantly shaped by robotics, which he described in grandiose and sometimes dystopian terms.

Despite the anticipation leading up to the event, the lack of detailed information about the new products led to a negative market reaction for Tesla's stock. On Friday, Tesla's shares fell by 9%, indicating investor disappointment over the vagueness of the company's announcements. In contrast, competitors Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) experienced a surge in their stock prices, with relief rallies of approximately 10%. This market movement suggests a reduced likelihood of Tesla launching competitive services within the next two years, according to market sentiment.

In other recent news, Tesla has been the focus of several analyst firms following their announcements of new autonomous vehicle projects. HSBC initiated coverage on Tesla with a "Reduce" rating, citing concerns about Tesla's ambitious timelines for the release of its Cybercab and Full Self-Driving (FSD) features. Stifel confirmed its Buy rating on Tesla, despite noting a lack of detailed information about the FSD technology. Piper Sandler maintained an Overweight rating, while Roth/MKM maintained a Neutral rating, expressing skepticism about the practicality of Tesla's unsupervised FSD technology.

Tesla's earnings and revenue remain a critical focus for investors. The company recently announced the launch of its Cybercab in 2026 and plans for unsupervised FSD in Texas and California by 2025. Tesla's other ambitious plans include the introduction of the Robovan, a large autonomous vehicle for passenger or goods transport, and the Optimus robot.

Tesla has also converted 500 temporary positions into permanent jobs at its German gigafactory in Gruenheide, near Berlin. Despite these developments, firms such as Truist Securities, Morgan Stanley, and Oppenheimer maintain a cautious outlook. However, RBC Capital expressed optimism for Tesla's long-term prospects, particularly regarding robotaxis and humanoid robots.

InvestingPro Insights

Following Tesla's recent product announcement event and the subsequent market reaction, InvestingPro data provides additional context to the company's current financial position. Tesla's market capitalization stands at $695.79 billion, reflecting its significant presence in the automotive industry. The company's P/E ratio of 56.24 indicates that investors are willing to pay a premium for Tesla's future growth prospects, despite the recent stock price decline.

InvestingPro Tips highlight that Tesla "holds more cash than debt on its balance sheet," which could provide financial flexibility as the company pursues its ambitious product roadmap. However, it's worth noting that "8 analysts have revised their earnings downwards for the upcoming period," potentially reflecting concerns about the company's near-term performance following the product event.

The stock's recent volatility is underscored by the fact that it has "taken a big hit over the last week," aligning with the 9% drop mentioned in the article. This volatility is further emphasized by InvestingPro data showing a -9.56% 1-week price total return.

For investors seeking a more comprehensive analysis, InvestingPro offers 20 additional tips for Tesla, providing a deeper understanding of the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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