Stifel opened coverage on Tesla in the bull camp and foresees a rebound ahead.
Analyst Stephen Gengaro initiated the electric vehicle maker at a buy rating with a $265 price target. Gengaro’s target implies 41.4% upside from Tuesday’s closing level.
Tesla shares gained 3.3% in morning trading.
“We believe TSLA is very well positioned to deliver robust multi-year growth in 2025-27+,” he wrote to clients in a Tuesday note.
A revamp to Model 3 and Model Y cars should boost sales in the near term, the analyst said. Then, he said the start of production on its next-generation vehicle called the Model 2 should aid demand.
Tesla’s full-self driving initiative can also bring value through sales, licensing and the potential RoboTaxi opportunities, Gengaro said.
To be sure, he cited lackluster first-quarter earnings, challenges with broader electric vehicle adoption and the U.S. election as potential risks to performance in the near term.
Gengaro’s call suggests shares can see a big bounce after a tough year. The stock has dropped more than 24% so far in 2024, meaning it has sat out of the broader market’s ascent.
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