RBC maintains Tesla stock Outperform rating, $320 price target

On Friday, RBC Capital maintained its Outperform rating on Tesla stock (NASDAQ:TSLA) with a steady price target of $320.00. Stifel analysts estimate that Tesla’s deliveries for the first quarter of 2025 will fall short of the consensus, predicting 364,000 vehicles compared to the 398,000 expected by Visible Alpha. According to InvestingPro data, 12 analysts have recently revised their earnings estimates downward, while the stock trades at a P/E ratio of 119x with a market capitalization of $853 billion.

The anticipated lower delivery numbers for the quarter are attributed to intentional production halts during January and February for a Model Y refresh. Additionally, potential buyers might have postponed their purchases in anticipation of Tesla’s new affordable model, which is slated for release in the second quarter of 2025. The stock has experienced significant volatility, with a beta of 2.51 and a year-to-date decline of 32.37%.

Tesla’s performance in China is also a contributing factor to the lower delivery forecast, with a projected 47.8% decrease in deliveries for the first quarter of 2025 compared to the fourth quarter of 2024. The decline in China was evident with a 57% drop in deliveries in January and February against the figures from October and November. Moreover, weekly insurance data from March indicates a continuing downward trend, reinforcing the analysts’ expectations of weaker performance in China for March compared to December.

In Europe, Tesla’s expected deliveries for the first quarter of 2025 are predicted to be down by 19.9% from the fourth quarter of 2024. The region saw a 33% reduction in deliveries during January and February when compared to the deliveries in October and November of the previous year.

RBC Capital’s analysis suggests that despite the anticipated dip in deliveries for the first quarter, the firm remains confident in Tesla’s market position, as reflected in the reaffirmed Outperform rating and price target. Tesla is expected to report its delivery numbers next week, which will provide further insight into the company’s performance in the early months of 2025. InvestingPro analysis indicates Tesla is trading above its Fair Value, with revenue growth forecast at 13% for FY2025. Get access to Tesla’s comprehensive Pro Research Report and 18 additional ProTips by subscribing to InvestingPro.

In other recent news, Tesla has been in the spotlight with several key developments. The company is facing an investigation by the FBI due to an increase in violent activities targeting it, which the FBI Director labeled as "domestic terrorism." Meanwhile, Tesla’s stock has received attention from analysts, with Canaccord Genuity maintaining a Buy rating and setting a price target of $404.00, while Piper Sandler reaffirmed an Overweight rating with a $450.00 target. Both firms cited supply constraints as a significant factor affecting Tesla’s delivery numbers, rather than demand issues.

Canaccord Genuity adjusted its delivery estimate for the first quarter of 2025 to 362,000 vehicles, noting production challenges and consumer behavior as influencing factors. Tesla’s CEO, Elon Musk, has acknowledged the impact of auto import tariffs, which have affected the company’s operations. Piper Sandler highlighted potential growth opportunities for Tesla, such as the introduction of a robo-taxi service. These recent developments reflect ongoing challenges and opportunities for Tesla as it navigates production issues and prepares for future initiatives.

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