Analysts at investment firm Stifel have raised their outlook for Tesla stock by 43%, citing a clearer path to regulatory approval for the company’s autonomous driving programs. The update comes after President Donald Trump won a second presidential term, which has been seen as a boon for Tesla due to its involvement with Trump and potential changes in regulations.
Stifel analysts led by Stephen Gengaro believe that Trump’s support for laxer regulation will benefit Tesla more than its automaker peers. However, the company’s core electric vehicle business remains a concern, with shares being “clearly significantly overvalued” if viewed as an auto company.
Despite this, Morgan Stanley analysts are optimistic about Tesla’s long-term direction, particularly in its self-driving and artificial intelligence applications. They have assigned a $63 per share value to Tesla’s auto business, which is less than a fifth of the current share price.
Tesla CEO Elon Musk has expressed confidence that his company will be able to capitalize on this trend, stating that anyone who doesn’t believe Tesla will solve vehicle autonomy should not hold the stock. The company’s market capitalization is over $1.1 trillion, making it more valuable than the combined valuations of the world’s next 10 most valuable publicly traded car companies.
Tesla shares have rallied 3.5% to $357 on Monday, their highest level since April 2022. The stock has surged 41% since Election Day, despite a trying year for Tesla’s financial performance. Experts believe that Trump’s support for more lax regulation will help Tesla, while tariffs and a rollback in tax credits will have less of an impact on the company than its peers.
Note: Forbes is not included as it is not related to the content of the article.
Source: https://www.forbes.com/sites/dereksaul/2024/12/02/tesla-stock-a-buy-despite-significantly-overvalued-core-ev-business-analyst-says