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On Thursday, Piper Sandler adjusted its outlook on Tesla stock (NASDAQ:TSLA), reducing the price target from $500 to $450, yet maintaining an Overweight rating on the electric vehicle manufacturer. Piper Sandler’s analyst cited a mix of operational challenges as the rationale behind the lower price target, specifically pointing to factory shutdowns and the Model Y changeover as key factors impacting Tesla’s delivery numbers. According to InvestingPro data, nine analysts have recently revised their earnings expectations downward, with analyst targets ranging from $120 to $550, reflecting the market’s divided outlook on the stock.
The analyst’s remarks suggest a belief in Tesla’s resilience and long-term potential, despite the near-term obstacles. "TSLA’s now back to its pre-election valuation. Remember: this isn’t the first time TSLA has doubled and subsequently gotten cut in half, and it likely won’t be the last. In our view, nothing has changed re: Tesla’s ability to remake the world’s transportation and energy markets," the analyst stated. InvestingPro data shows Tesla maintains strong financial health with a current ratio of 2.02 and more cash than debt on its balance sheet, supporting its ability to weather market volatility.
The revised price target reflects a decrease in the expected number of vehicle deliveries for 2025. "We are cutting our 2025 delivery expectations," the analyst noted, acknowledging that quarter-to-date trends might lead other analysts to adjust their projections as well. However, the report downplayed political factors, instead attributing the delivery shortfall to specific production-related issues.
The analyst also underscored the conservative nature of the new price target, which is based on a price-to-earnings (P/E) valuation method. Even so, the firm’s discounted cash flow (DCF) analysis still supports a valuation above $300, not accounting for potential future contributions from Tesla’s ventures into humanoid robots or AI-as-a-service.
Closing the commentary, the analyst underscored the current value proposition offered by Tesla shares, stating, "At ~$234/sh, we think TSLA is cheap based solely on Autos+Energy+FSD." This sentiment reflects confidence in Tesla’s core businesses and the advanced driver-assistance features as key drivers of the company’s market value. The stock’s recent performance shows a YTD decline of 41.6%, though Tesla maintains robust financial metrics with a gross profit margin of 17.86% and positive free cash flow. For deeper insights into Tesla’s valuation and 16 additional ProTips, explore the full analysis available on InvestingPro.
In other recent news, Tesla has received initial approval from California to potentially launch a robotaxi service, marking a significant step in its efforts to expand into autonomous vehicle services. This development indicates that state regulators are open to Tesla’s plans, although further approvals are necessary before the service can be fully operational. Additionally, TD Cowen analysts have maintained their Buy rating for Tesla stock with a price target of $388, emphasizing the potential for long-term sales growth despite short-term political challenges. The analysts suggest that Tesla’s strategy to target regions with low electric vehicle penetration could offset losses in areas where it currently has a strong presence.
Meanwhile, Tesla is also making strides in the ride-hailing market, having received approval in California to start carrying passengers in its vehicles. This approval is a critical step toward Tesla’s entry into this new service area. However, the company has been the target of a series of violent attacks on its properties across the United States, including arson and vandalism, raising concerns among law enforcement about potential political motives. Legal actions have been taken against individuals involved in these attacks, with charges filed in states like Colorado and Oregon.
Despite these challenges, Tesla continues to focus on technological advancements and market expansion. The company’s ongoing efforts to innovate and diversify its offerings are evident in its pursuit of both autonomous and ride-hailing services. As these developments unfold, Tesla remains under close observation by regulatory bodies to ensure compliance with safety and regulatory standards.
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