S&P 500 falls on pressure from retail stocks, weak jobless claims
On Wednesday, Goldman Sachs reaffirmed its Neutral stance on Tesla stock (NASDAQ:TSLA), maintaining a price target of $235.00. The assessment followed Tesla’s recent earnings report, which Goldman Sachs found to have both positive and negative aspects. The electric vehicle maker’s non-GAAP earnings per share (EPS) for the first quarter of 2025 came in at $0.27, falling short of the consensus expectation of $0.41, according to FactSet. According to InvestingPro data, 12 analysts have recently revised their earnings estimates downward, with analyst targets ranging from $120 to $515.
Tesla chose not to provide formal financial guidance due to uncertainties surrounding tariffs. However, Goldman Sachs noted some positive takeaways, including Tesla’s automotive non-GAAP gross margin excluding regulatory credits, which surpassed consensus estimates. InvestingPro analysis shows the company’s overall gross profit margin stands at 17.86%, with the stock currently trading at a P/E ratio of 116.65. Additionally, despite the scaled-down launch, Tesla is still on track to initiate its robotaxi operations in June.
Goldman Sachs has adjusted its estimates for Tesla, citing potential downside risks to consensus estimates in the medium term. These risks stem from the impact of tariff costs on vehicle volumes and end demand. The firm also pointed to Tesla’s indication that its upcoming new models might be less unique than previously anticipated, which could lead to lower vehicle volumes and higher operating expenses (opex).
While acknowledging these immediate concerns, Goldman Sachs also recognized the potential for Tesla to achieve improved long-term profitability. This optimism is partly based on anticipated increased software revenue from Tesla’s Full Self-Driving (FSD) feature. However, the firm’s outlook on Tesla’s ability to monetize FSD is more cautious than the company’s own targets. Goldman Sachs’ current position reflects a balance between near-term market risks and the potential for future profit growth.
In other recent news, Tesla has been the focus of several key developments that are drawing attention from investors. Piper Sandler reaffirmed its Overweight rating on Tesla stock with a price target of $400, expressing confidence in the company’s upcoming initiatives, including the launch of robo-taxis and more affordable vehicles. In contrast, Truist Securities maintained a Hold rating with a $280 price target, citing weaker-than-expected first-quarter results and higher operational expenses. Truist noted Tesla’s revised expectations for 2025 growth due to tariff impacts. RBC Capital Markets lowered its price target to $307 from $314, maintaining an Outperform rating while highlighting the significance of Tesla’s upcoming milestones such as the robotaxi launch in Austin. Baird also adjusted its price target to $320 from $370, keeping an Outperform rating despite acknowledging challenges like the ramp-up of the new Model Y and global supply chain disruptions. The firm remains optimistic about Tesla’s mid-term prospects, pointing to potential catalysts such as the robotaxi operations and the introduction of new vehicle models. These recent developments reflect a mix of optimism and caution among analysts as Tesla continues to navigate the competitive electric vehicle market.
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