Canaccord maintains Tesla stock Buy rating and $404 target

Published 02/04/2025, 17:54
© Reuters.

Wednesday, Canaccord Genuity reaffirmed its Buy rating and $404.00 price target for Tesla stock (NASDAQ:TSLA), despite acknowledging the electric vehicle maker’s weaker-than-expected delivery numbers. The stock, which has declined over 33% year-to-date and shows significant volatility according to InvestingPro data, currently trades above its Fair Value estimate. Canaccord’s analyst cited various factors contributing to the lower production, including the transition of Model Y production lines across Tesla’s four factories, which resulted in several weeks of lost production in the first quarter. This transition comes as Tesla, with its substantial market capitalization of $908.67 billion, maintains its position as a prominent player in the global automotive industry.

The analyst pointed out that the current quarter might not accurately reflect any potential impact on the Tesla brand from recent events, suggesting that it’s too early to assess the materiality and permanence of any such impact. They noted the anticipation for the new, improved Model Y could have also caused a temporary dip in demand for legacy Model Y models.

Despite these challenges, the analyst observed strong demand for the new Model Y, bolstered by long lines in South Korea just for a glimpse of the vehicle and a particularly successful sales week in China. The analyst also mentioned upcoming developments, such as the introduction of more new models in 2025 and the launch of the Cybercab in June in Austin, as potential positive catalysts for the company’s growth.

Canaccord Genuity is looking forward to Tesla’s earnings call on April 29, where management is expected to address these recent events and possibly adjust guidance. With 13 analysts recently revising their earnings estimates downward, as revealed by InvestingPro’s comprehensive analysis (which includes 18 additional key insights available to subscribers), investors are eagerly awaiting management’s commentary on the company’s future outlook. The call is also anticipated to cover topics such as tariffs, margins, electric vehicle tax credits, the Optimus project, and energy storage demand.

The firm’s note to investors concluded with an optimistic outlook, suggesting that for those willing to weather the current volatility, Tesla presents a long-term opportunity. Canaccord’s stance remains that Tesla is well-positioned to capitalize on these opportunities in the future. For a deeper understanding of Tesla’s financial health and growth prospects, investors can access the detailed Pro Research Report, available exclusively on InvestingPro, which provides comprehensive analysis of the company’s $97.69 billion revenue business.

In other recent news, Lucid Group (NASDAQ:LCID) is experiencing delays in the delivery of its Gravity SUV due to unresolved safety testing, particularly with the vehicle’s third-row seating. Interim CEO Marc Winterhoff indicated that some deliveries might begin by the end of April, but volumes are expected to be small, with higher production ramping up in June or July. These developments come as Lucid faces challenges in meeting production targets and managing supply chain issues. Meanwhile, Tesla has been the subject of speculation regarding CEO Elon Musk’s political involvement, with rumors suggesting he may step back from his role in the U.S. government. Analysts at Barclays (LON:BARC) maintained an Equalweight rating on Tesla, noting production challenges in the first quarter, while Wedbush reiterated an Outperform rating, highlighting Tesla’s potential in autonomous driving technology. Oppenheimer maintained a Perform rating, citing concerns about Musk’s political activities and their impact on Tesla’s brand. Tesla’s upcoming production figures and technological advancements, such as the launch of a driverless taxi service, are being closely monitored by investors.

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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