Tesla Inc. (TSLA) shares have been on a remarkable trajectory, achieving a second consecutive record high on Tuesday, propelled by another significant analyst upgrade. Mizuho, in a notable endorsement, upgraded Tesla to an “outperform” status, adjusting its price target from $230 to $515. This upgrade, which implies an 11% increase from Monday’s $463.02 closing price, appears to have helped the stock to a new all-time high of $483.99 earlier today. However, it has since pulled back and is now hovering around $475.15. Despite this bullish momentum, the median Wall Street price target remains more cautious at approximately $300.
The Mizuho upgrade highlights what they describe as “idiosyncratic tailwinds” for Tesla over the next four years, particularly under the anticipated policies of the incoming Trump administration. Key among these is the potential for regulatory relief in the autonomous driving sector, which could accelerate Tesla’s initiatives in self-driving technology. Additionally, the proposed repeal of the consumer EV tax credit might paradoxically benefit Tesla by leveling the playing field with competitors who have not yet exhausted their credit benefits.
Tesla’s stock has seen a staggering 90% increase in 2024, with a significant portion of this surge, 37% of it, occurring post-election on November 5. The market’s enthusiasm is largely driven by expectations that the close relationship between CEO Elon Musk and President-elect Donald Trump will provide favorable conditions for Tesla’s diverse business ventures, from electric vehicles to energy solutions.
This bullish sentiment was echoed just a day prior by Wedbush, another influential brokerage firm, which not only raised its price target to $515 from $400 but also projected a “bull case” scenario where Tesla could reach $650 in the following year. Wedbush’s analysts, including Dan Ives, are particularly optimistic about Tesla’s potential to reach a $2 trillion market capitalization by the end of 2025, banking on the company’s advancements in autonomous driving technology and an expected increase in EV deliveries in China.
These upgrades and the subsequent stock performance reflect a broader market confidence in Tesla’s strategic direction under Musk’s leadership, especially in light of potential policy shifts that could favor Tesla’s business model. However, while the positive outlook from analysts is clear, the reality of executing such ambitious growth, especially in volatile regulatory environments and competitive markets like China, will be crucial in determining whether these high expectations will be met.
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