Despite recent setbacks, one analyst is optimistic about Tesla Inc TSLA and has projected a substantial upside for the company’s stock.
What Happened: The stock of the electric vehicle (EV) giant, led by Elon Musk, has experienced a 14.5% decline over the past year. This trend continued on Tuesday when Tesla reported lower-than-expected vehicle deliveries for the first quarter of 2024, reported CNBC.
Despite this, RBC Capital Markets analyst Tom Narayan remains bullish on Tesla. He pointed out that the stock is only down 4.5% and believes that expectations are already quite low on CNBC’s “Squawk Box Asia.” Narayan has an outperform rating on Tesla with a target price of $298, indicating a potential 79% upside.
Narayan is particularly optimistic about Tesla’s full self-driving product, which he sees as a significant near-term catalyst. He highlighted potential growth areas beyond Tesla’s automotive business, such as energy storage and autonomy.
"FSD is an incredible product. And that version 12 is out there now — I watched a bunch of YouTube videos and people are really impressed by this product, maybe that gets people in the showrooms, maybe it gets people to subscribe to it maybe it gets people to buy cars. So there is that near term catalyst," the analyst said.
Out of 51 analysts covering Tesla, 17 have a buy or overweight rating, 24 have a hold rating, and 10 have a sell or underweight rating. According to the report, the average price target is $198.87, suggesting a 19.4% potential upside.
Why It Matters: Narayan’s optimistic outlook comes when Tesla has been facing challenges. The company’s stock took a hit following the disappointing Q1 deliveries, and a prominent Tesla bear has even warned of its potential dire situation.
However, other industry figures, such as Cathie Wood of Ark Invest, have been buying Tesla shares on recent weakness, anticipating a significant rise in the stock’s value. This diverse range of opinions reflects Tesla’s future uncertainty, making Narayan’s bullish prediction a notable development.
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