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Investing.com -- Analysts at Stifel in a note dated Monday trimmed their price target for Tesla (NASDAQ:TSLA) to $474 from $492, citing a mix of positives and ongoing headwinds following the company’s fourth-quarter earnings report.
While the brokerage maintained its “buy” rating, concerns around pricing pressure, declining favorability, and tough competition in China weighed on the revised outlook.
Tesla reported $25.7 billion in revenue for the fourth quarter, falling short of Stifel’s expectations by 9.6%.
However, adjusted EBITDA came in stronger than anticipated at $4.92 billion, marking a 24.5% year-over-year increase.
The automotive company posted a record-low cost of goods sold per vehicle at $33,000, down from $35,300 in the previous quarter.
Despite the cost improvements, uncertainty surrounding Tesla’s future sales growth remains.
The company pulled back on its previous 20-30% vehicle delivery growth guidance for 2025, citing multiple factors such as the pace of its autonomy rollout, factory production ramps, and broader macroeconomic conditions.
Tesla’s autonomy program remains a key factor in Stifel’s valuation model. The brokerage sees the planned June 2025 launch of unsupervised Full Self-Driving (FSD) in Austin, Texas, as a potential stock catalyst.
The introduction of a lower-priced vehicle in the first half of 2025 is also expected to expand Tesla’s addressable market.
Meanwhile, the company’s energy storage business continues to show strength, with deployments hitting a record 11 GWh in Q4 and expectations for a 50% increase in 2025.
However, near-term challenges persist. Stifel said that Tesla’s favorability rating is nearing all-time lows, which could impact demand.
Analysts also pointed to continued pricing headwinds and intensifying competition from Chinese automakers as risks.
Stifel adjusted its 2025 and 2026 EBITDA forecasts downward, now expecting $20.04 billion and $23.51 billion, respectively, compared to previous estimates of $21.22 billion and $25.73 billion.
The new price target reflects a valuation approach incorporating Tesla’s core business, autonomy efforts, Robotaxi potential, and Optimus program, but with more conservative assumptions.
While Stifel remains bullish on Tesla’s long-term prospects, the brokerage acknowledges the company is navigating a complex environment with multiple moving pieces.