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Investing.com -- Benchmark added Tesla (NASDAQ:TSLA) stock to its "Best Ideas" list on Wednesday, arguing that the recent sell-off and dip in sales are overdone relative to the company’s near-term catalysts and long-term growth potential.
The brokerage reiterated its Buy rating on the automaker’s shares but lowered its price target from $475 to $350 to reflect the recent sentiment shift following tariff announcements.
Tesla shares have dropped sharply from their post-election high above $480, retreating to the low $200s. Benchmark analyst Mickey Legg sees this pullback as an opportunity.
“We believe the recent stock pullback and sales declines, while significant, are overblown considering the near-term issues impacting the company and the scope of opportunities around the corner,” he said in a note.
A key driver of optimism is Tesla’s expected new vehicle release in the second quarter, which Legg views as a potential turning point for deliveries.
In addition, the analyst is “cautiously optimistic” about the upcoming launch of Tesla-operated robotaxis as a paid service in Austin, Texas, scheduled for June. While initially limited in scope, Legg is monitoring the pace of geographic expansion.
Legg also highlighted Tesla's limited exposure to new U.S. auto tariffs, since its North American production is concentrated in California and Texas, providing a relative advantage over other automakers.
Longer-term, Tesla’s ambitions beyond vehicles remain central to the bull case. Benchmark's note pointed to the company’s Optimus robotics platform, which could enable Tesla to transition “from a vehicle manufacturer into a broad automation provider.”
At the same time, the brokerage acknowledged several risks, including political pressure, an aging product line, and intensifying global competition. However, it sees signs that headwinds such as political backlash may ease as the year progresses.
“We believe the breadth of near-term opportunities outweigh headwinds,” Legg said, adding that autonomy and robotics could become major growth engines in the years ahead.
Despite cutting the target price, Benchmark continues to assign Tesla a market premium, citing its “market leadership, near-term catalysts, strong management, and diversified business.”