Tesla Stock To Rally 33%? Analyst Expects EV Giant's Growth To Reaccelerate In 2024 Thanks To This 'Significant Competitive Advantage'

Zinger Key Points

In 2024, the factors that drove EV demand lower will likely turn positive, says an Argus analyst.
Argus has a "Buy" rating and a $316 12-month price target for Tesla's stock, suggesting a 33% upside potential.
Get Monthly Picks of Market's Fastest Movers

Tesla, Inc. TSLA shares have been languishing since the company released its third-quarter earnings report in mid-October. The stock did not budge despite the electric vehicle maker reporting above-consensus deliveries report last week. Still, an analyst on Friday doubled down on his bullish stance on the Elon Musk-led company.

Reacceleration In The Cards: Tesla’s sales, margins and earnings per share will likely reaccelerate in 2024, said Argus analyst Bill Selesky. In 2024, the factors that drove demand lower, namely a sluggish EV market, rising interest rates, elevated inflation and supply-chain disruptions, will turn positive, the analyst said.

He expects interest rates to trend lower, inflation to decelerate and supply chains to improve.

Tesla’s USP: Tesla’s growing dependence on artificial intelligence in manufacturing and factory utilization has given it a significant competitive advantage, Selesky said.

“Additionally, we believe AI is an undervalued component of the future growth at Tesla and expects its value to be recognized soon on Wall Street as FSD (full-self drive, battery cell production, and AI-enabled robots become a bigger part of the future at Tesla,” he said.

Poised To Grow: Tesla is the leader in the EV industry, as it accounted for roughly 50% of the EV market in the U.S. and 20% of global shipments, Selesky said. ‘

‘We believe TSLA has an opportunity to grow market share in 2024,”‘ the analyst said.

Deepwater Asset Management’s Gene Munster said in his 2024 tech predictions that he expects Tesla to maintain its U.S. market share.

Selesky noted that recent entrants to the EV market, such as Ford Motor Co. F, General Motors Corp. GM, Toyota Motor Corp. TM and Volkswagen AG VWYAG, and brand new entrants, such as Nio, Inc. NIO, Lucid Motors, Inc. LCID and Rivian Automotive, Inc. RIVN, have been struggling to right-size their future capex budgets.