Analyst raises Tesla value goal, maintains Purchase ranking regardless of deliveries miss

Canaccord Genuity has lifted its Tesla (NASDAQ:TSLA) inventory value goal to $404 from $298, sustaining a Purchase ranking regardless of weaker-than-expected deliveries within the fourth quarter. The transfer comes because the monetary companies agency stays assured concerning the carmaker’s long-term progress potential and the upcoming product launches.

In accordance with Canaccord’s Thursday word, the brand new goal value is predicated on 40x Canaccord’s 2027E non-GAAP earnings per share (EPS) estimate of $10.11, in comparison with a earlier a number of of ~34x on 2026E EPS.

“We really feel this a number of is justified primarily based on the multiples and progress charges of Tesla’s comp set — which we deem to be a gaggle of megacap tech shares, together with Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Meta (NASDAQ:META), Microsoft (NASDAQ:MSFT), and Nvidia (NASDAQ:NVDA),” analyst George Gianarikas mentioned within the word.

“This set of firms trades at a median of ~23x 2027E EPS however has a mixed income progress fee ~half of Tesla’s from 2025-2027,” he added.

Tesla’s newest supply outcomes had been beneath expectations. The corporate reported 4Q24 deliveries of round 495,600, representing 7.1% sequential progress however falling wanting Canaccord’s estimate of ~533,000 and the consensus estimate of ~498,000. Tesla’s manufacturing in the identical quarter declined by 2.2% sequentially to ~459,500 items.

Canaccord’s choice to take care of its bullish stance facilities on new product introductions slated for 2025. Tesla has guided for brand new autos and anticipates 20-30% year-over-year unit quantity progress.

“Tesla tends to ship pleasure when it refreshes its portfolio,” the word said. This progress potential, mixed with indicators of bottoming auto gross margins, helps Canaccord’s constructive outlook. Tesla diminished the price of items offered per automobile to $35,100 in 3Q24, the bottom within the firm’s historical past.

“We’ll see how new merchandise impression the combination — however we do forecast bettering margins in 2025,” Gianarikas mentioned.

Canaccord additionally highlighted advances in Tesla’s Full Self-Driving (FSD) software program. Whereas the agency stays cautious about timelines for robotaxi deployments, current updates to FSD have been described as “unbelievable, unbelievable” by customers, signaling potential for larger adoption charges.

“A rise in FSD adoption may positively impression Tesla’s revenue margins and bolster confidence within the firm’s capacity to monetize its substantial funding in synthetic intelligence infrastructure,” the analyst continued.

Furthermore, Tesla’s vitality storage phase stays a vibrant spot. Deployments surged to about 11.0 GWh in 4Q24, up 59.4% sequentially and 243.5% year-over-year. The development of Tesla’s Shanghai Megafactory was accomplished in late 2024, and manufacturing is predicted to ramp up in 1Q25.

Lastly, Canaccord factors to the potential within the robotics sector for Tesla, emphasizing it sees 2025 “because the yr of the robotic.”

“We see rising assist for Tesla’s earnings a number of primarily based on its management on this burgeoning sector.”