Ives说：Wedbush analyst Ives gave a target price of $300, expecting a more than 40% increase from Wednesday's close, stating that price cuts have completely become a thing of the past, which is key to increasing profit margins for Tesla's future AI transformation; JPMorgan analyst Brinkman raised the target price by nearly 4% to $135, still nearly 37% lower than Wednesday's close, believing that factors such as 'carbon sales' revenue and working capital gains in the third-quarter results are not sustainable.
$Tesla (TSLA.US)$ The exceptional profit increase in the third quarter has shaken the market, with the stock price surging over 20% during Thursday's trading session after the financial report was released. However, there is a huge difference in opinions among Wall Street institutions on the future trend of Tesla's stock price. Some are very bullish, even expecting the stock price to rise by over 40%, while others are more cautious, believing that Tesla has not yet addressed long-term growth concerns, and even forecast that the future stock price will drop by nearly 40%.
On the bullish side are staunch Tesla bulls like Wedbush analyst Dan Ives. He has given Tesla an outperform rating in the industry, with a target price of $300 for the next 12 months, which is equivalent to an expected 40.4% surge in Tesla's stock price compared to Wednesday's close. Ives stated that the increase in profit margins in the third quarter "clearly indicates that while balancing its future plans, Tesla is still focusing on profitability."
Ives said:
"Gone are the days of price reductions. We believe that, for Wall Street, this is a key factor in proving Tesla's ability to increase profit margins while transitioning to AI/FSD in the coming years. Following the turbulent year 2024, the much-needed margin improvement has been achieved, and the bulls will be cheering this quarter."
Piper Sandler analyst Alexander Potter gave a buy rating to Tesla, with a target price even higher than Ives at $310, meaning an expected 45% increase from Wednesday's closing. Potter commented that Tesla's third-quarter report "performed surprisingly well in almost all aspects," and even if the facts prove the company's own expectations to be optimistic, there is still "upside potential."
Canaccord Genuity analyst George Gianarikas raised Tesla's target price by $24 to $278, expecting a 30% increase from Wednesday's close. Gianarikas summarized Tesla's financial report as a "product cycle story of accelerated revenue and profit growth," mentioning some bullish aspects such as Tesla's announcement to start producing ultra-low stock price models next year and plans to produce around 2 million self-driving TaxiRobotxi business vehicles by 2026 named Cybercab.
Truist Securities analyst William Stein gave Tesla a hold rating, raising the target price slightly from $236 to $238, equivalent to an estimated stock price increase of about 11.4% from Wednesday's closing.
Stein believes that Tesla's profit growth benefited from strong margin performance. However, he also pointed out that Tesla did not provide detailed information about the 2025 models, enhancements to the Full Self-Driving (FSD) system, or the Optimus humanoid robot project.
Representing the bearish side is JPMorgan analyst Ryan Brinkman. He emphasized that while investors may be excited about Tesla's unusually high profit growth, the catalysts driving this stock price surge cannot be considered long-term growth factors. He advised investors not to overemphasize the "explosive rise" in Tesla's stock price immediately after the earnings report, believing that the market reaction brought about by the performance report is "unsustainable".
Brinkman noted that Tesla's third-quarter earnings and cash flow improved, driven by several unsustainable factors. These include the so-called "carbon sales" revenue from selling carbon emission credits, and abnormally high operating working capital gains.
Therefore, Brinkman maintained his hold rating on Tesla. He raised Tesla's target price from $130 to $135, despite a 3.8% increase, the new target price is still 36.8% lower than Tesla's Wednesday closing price. This implies that he expects Tesla's stock price to drop by nearly 37% from this Wednesday's basis.
TD Cowen analyst Jeff Osborne gave Tesla a hold rating with a target price of $180. This target price indicates an expected decrease of nearly 15.6% from Wednesday's closing. Osborne pointed out that Tesla's third-quarter performance was driven by strong gross margin and mentioned that the launch of new vehicles by the company is still expected to proceed smoothly in the first half of next year.
Wolfe analyst Emmanuel Rosner gave Tesla a neutral industry rating, believing that the continuous rise in Tesla's stock price requires confidence in two key factors: accelerated growth in the automotive business and confidence in achieving fully autonomous driving. Rosner also mentioned that Tesla's management discussed these points during the third-quarter earnings conference call.
Additionally, Morgan Stanley analyst Adam Jonas gave Tesla an overweight rating with a target price of $310, similar to Potter's target price. He believes that the third-quarter performance "may mark a turning point in profit expectations for the automotive sector." However, earlier reports raised questions about whether growth concerns have genuinely eased, including doubts expressed by Morgan Stanley analysts like Jonas.
These analysts listed a series of market concerns but still pending issues in the report, including the direction of Tesla's capital expenditures growth, the percentage of AI in capital expenditures, and the duration of the payback period; Tesla's development path in autonomous driving, government certification, and insurance before the launch of fully autonomous driving technology in 2025; whether there will be abnormal situations in the fourth quarter that could lead to unmet profitability expectations; where the power for the expected over 180% growth in energy storage systems in the fourth quarter will come from.
Goldman Sachs analysts like Mark Delaney raised Tesla's target price from $230 to $250, expecting a 17% increase in the stock price from Wednesday's close. These analysts maintain a neutral rating on Tesla but have doubts about Tesla's ability to achieve FSD performance and vehicle delivery growth targets by 2025, as well as the sustainability of the gross margin.
Editor/new
