Eos Energy stock falls after Fuzzy Panda issues short report
Investing.com -- Bank of America raised its price objective on Tesla to $471 from $341 but maintained a Neutral rating, saying the company remains the clear leader in “physical AI” but warned that its valuation remains stretched.
The new target is based on a sum-of-the-parts (SOTP) valuation that assigns roughly 45% of Tesla’s total value to its robotaxi business, 19% to Optimus, 17% to Full Self Driving, 12% to core automotive, and 6% to energy generation and storage, BofA analysts said.
The team led by Federico Merendi said the higher target reflects “a lower cost of equity capital, better Robotaxi progress, and a higher valuation for Optimus to account for the potential entrance into international markets.”
BofA revised its estimates to include stronger energy margins, cheaper Model 3/Y versions, and an initial Robotaxi contribution, but also raised operating expenses to reflect growth investments.
It now forecasts operating expenses of $13.2 billion in 2026, 24% above prior estimates.
“We continue to see TSLA as the company with the largest advantage in terms of autonomous driving initiatives and physical AI applications currently in the marketplace. However, we acknowledge that there are challenges in the near term and the current valuation is stretched,” the analysts wrote.
Tesla’s third-quarter results showed revenue of $28.1 billion, up 12% year-on-year and above estimates, driven by record deliveries of 497,099 vehicles.
Automotive margins declined to 17% due to higher costs and tariffs, while the energy division outperformed with gross margins of 31.4%.
Operating expenses rose 44% year-on-year as AI and R&D spending increased 57%.
Analysts said near-term headwinds persist in the North American auto segment after the expiration of Inflation Reduction Act incentives, echoing Elon Musk’s warning of “a few rough quarters.”
They remain more positive on energy and robotaxi expansion, noting Tesla’s service area in Austin has tripled and the company expects to launch Robotaxi in up to ten metro areas by year-end.
“Tesla’s vision-based approach has the potential to allow for much quicker scaling of Robotaxi vs. competitors,” analysts said.