Wall Street Weighs In On Tesla's Autonomy Day Presentation

Visionary Tesla, Inc. TSLA CEO Elon Musk on Monday laid out an extremely optimistic timetable for Tesla’s autonomous vehicle technology at the company’s Autonomy Investor Day event. Unfortunately for Tesla investors, Wall Street wasn’t particularly impressed by what Musk had to say, and the stock continued to trade near its 2019 lows on Tuesday morning.

Musk said Tesla will have fully autonomous taxis on the roads by 2020 and will begin making cars with no steering wheels or gas pedals by 2021. He also said buying any other automobile other than a Tesla is “financially insane,” and owning other vehicles “would be like owning a horse in three years.”

Several analysts weighed in on Tesla’s AV update.

Impressive Technology

SunTrust analyst William Stein is both hopeful and skeptical about Musk’s claims.

“Investors should recognize that, if the company achieves its autonomous driving goals, combining this with its already-achieved EV technology conspire to establish a ride hailing service that could be quite financially compelling to both the car owner and the rider,” Stein wrote.

Canaccord Genuity analyst Jed Dorsheimer said Musk is promising mind-blowing Level 5 autonomous capabilities within a year’s time.

“We continue to see Tesla as the clear leader in EVs, and if anything remotely close to the timeline for Level 5 capabilities that the company has laid out occurs, the formidable lead that the company has in autonomy will result in meaningful market share gains,” Dorsheimer wrote.

Canaccord Genuity has a Buy rating and $391 target on Tesla.

Shifting Focus From Q1

Morgan Stanley analyst Adam Jonas said the impressive AV technology presentation was likely strategically positioned just ahead of earnings to remind investors to look beyond what could be a disappointing quarter.

“We believe the autonomous day was meant to help the stock market focus on the multiple (strategic value) rather than the earnings (fundamental value),” Jonas wrote.

Morgan Stanley has an Equal-Weight rating and $240 target.

Loup Ventures' Gene Munster feels more optimistic about Tesla’s future following the AV presentation.

“If you take Musk’s comments at face value (which we don’t recommend), the company could go from a loss of $1.3B in 2019 to over $300B in gross profit in 10 years,” Munster wrote in a blog post.

Tesla's stock traded around $264.73 per share at time of publication after hitting an intraday low of $256.36. The company will release first-quarter earnings Wednesday afternoon.

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