Goldman Sachs raises Tesla stock price target to $395 on growth outlook

Investing.com - Goldman Sachs has raised its price target on Tesla (NASDAQ:TSLA) to $395 from $300 while maintaining a Neutral rating on the stock. Tesla currently trades at $425.86, with InvestingPro data showing the stock trading at a P/E ratio of 251x and suggesting overvaluation relative to its Fair Value.

The price target increase reflects higher market multiples generally, Tesla’s long-term growth potential, and Goldman’s increased forward earnings estimates for the electric vehicle maker. The stock has shown remarkable momentum, gaining 15.47% in the past week and maintaining a market capitalization of $1.42 trillion.

Goldman Sachs identifies three key focus areas for investors following the stock’s recent rise: Tesla’s progress with autonomy and robotaxis, particularly removing human safety observers; development of the Optimus 3 robot with its year-end prototype target; and profit margins amid changing IRA credits and tariffs. InvestingPro data reveals Tesla’s current gross profit margin stands at 17.48%, with 20+ additional insights available to subscribers.

The investment bank projects Tesla’s 2030 earnings per share could range from approximately $2-3 to $20, with a middle scenario suggesting $7-9 EPS and a compound annual growth rate of 40-50%.

Goldman notes potential upside to its price target if Tesla achieves significant market share in humanoid robotics and autonomy, while warning of possible downside if competition limits profits or if Tesla faces execution challenges.

In other recent news, Tesla has reached a confidential settlement with the family of a teenager killed in a 2019 crash involving a Model 3 using Autopilot, avoiding a jury trial that was set to begin soon. In another development, CEO Elon Musk purchased nearly $1 billion worth of Tesla shares, a move interpreted by William Blair analysts as a show of confidence in the company’s future, particularly its robotaxi initiative. Meanwhile, the U.S. National Highway Traffic Safety Administration has opened an investigation into approximately 174,290 Tesla Model Y vehicles due to reports of electronic door handle malfunctions. Additionally, Morgan Stanley has drawn parallels between Tesla’s potential in the AI robotics sector and the TikTok situation, suggesting future collaborations between U.S. technology and Chinese manufacturing. A Morgan Stanley analyst also highlighted Tesla’s Full Self-Driving (FSD) technology as a "game changer" after a 1,400-mile road trip, noting its reliability and convenience. These developments are part of Tesla’s ongoing activities and challenges in the market.

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