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On Wednesday, Canaccord Genuity revised its price target for Tesla (NASDAQ:TSLA) shares, lowering it to $303 from the previous $404, while still upholding a Buy rating on the electric vehicle manufacturer’s stock. The adjustment reflects a new valuation based on projected earnings, as explained by Canaccord Genuity’s analysis. According to InvestingPro data, Tesla currently trades at $237.97, with analyst targets ranging from $120 to $465.70, reflecting the market’s divided outlook on the stock’s valuation.
The firm’s analyst, George Gianarikas, indicated that the new price target is set at approximately 34 times the estimated non-GAAP earnings per share (EPS) for the year 2027, which is expected to be $8.86. This valuation is considered appropriate when comparing Tesla to its peers, a group of large technology companies including Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), and Nvidia (NASDAQ:NVDA). This comparison set currently trades at a median of around 17 times their projected 2027 EPS, according to data from FactSet. InvestingPro analysis shows Tesla currently trades at a P/E ratio of 116.65, with 12 analysts recently revising their earnings expectations downward for the upcoming period.
Gianarikas highlighted that although these companies have a lower combined revenue growth rate than Tesla for the period from 2025 to 2027, Tesla’s premium multiple is justified by its potential for substantial long-term growth. The analyst emphasized Tesla’s array of opportunities that could drive growth, such as electric vehicles (EVs), autonomy and artificial intelligence (AI), energy storage, and robotics. InvestingPro data reveals Tesla’s strong financial position with a current ratio of 2.02 and projected revenue growth of 10% for FY2025, supporting its growth narrative.
The price target reduction comes amidst a backdrop where Tesla continues to be a dominant player in the EV market, with ambitious expansion plans and technological advancements in its pipeline. The analyst’s maintained Buy rating suggests a confidence in Tesla’s ability to capitalize on these growth opportunities, despite the lowered price target.
Investors and market watchers will likely monitor Tesla’s performance closely, especially in relation to the milestones and sectors outlined by Canaccord Genuity, as the company continues to innovate and expand its presence in the rapidly evolving automotive and technology industries.
In other recent news, Tesla has adjusted its capital expenditure forecast for the year, reducing it to over $10 billion from the previous estimate of above $11 billion. This adjustment was attributed to potential changes in trade policy that could affect project timelines. Following Tesla’s first-quarter earnings report, several firms have maintained their ratings on the company’s stock. Needham kept a Hold rating, expressing concerns over ongoing stress in Tesla’s automotive sector and skepticism about demand recovery. Stifel reiterated a Buy rating with a $455 price target, highlighting optimism about Tesla’s Full Self-Driving capabilities and the upcoming Robotaxi services. BofA Securities maintained a Neutral rating with a $305 price target, noting that Tesla’s earnings per share of $0.27 fell short of expectations. Evercore ISI also maintained an In Line rating with a $235 price target, despite Tesla’s earnings miss and increased operating expenses. These developments reflect a mix of cautious and optimistic outlooks from analysts regarding Tesla’s near-term and long-term prospects.
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