Equities

Tesla's Potential Soars with 79% Upside Target Amid Resilient Performance

POSITIVE

Analyst sees 79% upside for Tesla, highlighting growth in FSD and energy storage sectors.

By Bill Bullington

4/3, 19:21 EDT
Tesla, Inc.
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Key Takeaway

  • RBC Capital Markets sets Tesla's target price at $298, indicating a 79% upside, highlighting its potential in FSD and energy storage.
  • Analyst Tom Narayan emphasizes Tesla's resilience and growth opportunities beyond the automotive sector, including software business prospects.
  • Despite mixed market sentiment, 17 analysts rate Tesla as buy or overweight with an average price target of $198.87, suggesting a 19.4% upside.

Tesla's Resilient Performance

Despite recent market fluctuations and delivery numbers that fell short of analyst expectations, Tesla Inc. remains a beacon of innovation and growth potential in the electric vehicle (EV) sector. The company's stock, having experienced a modest decline over the last year, presents what some analysts see as a ripe opportunity for investors with a long-term perspective.

Analysts See Upside

Tom Narayan from RBC Capital Markets, a notable voice in the industry, maintains an optimistic outlook on Tesla, highlighting the company's resilience amidst market challenges. "The stock, despite this performance today, is only down like 4.5%, which makes me think that expectations are already really low," Narayan commented, suggesting that the market may have already adjusted to recent news, setting the stage for potential growth.

Potential for Growth

RBC Capital Markets has set a target price of $298 for Tesla, indicating a substantial potential upside of close to 79%. This bullish stance is underpinned by Tesla's innovative strides in its full self-driving (FSD) product and its ventures beyond the automotive sector. Narayan's enthusiasm for the FSD technology is palpable, "FSD is an incredible product... maybe it gets people to subscribe to it maybe it gets people to buy cars. So there is that near term catalyst," he noted, pointing to the product's potential to attract consumers and drive sales.

Beyond Automobiles

Looking further ahead, Narayan identifies significant growth opportunities in areas such as energy storage and autonomy, sectors that are yet to be fully appreciated by the market. "Bigger than everything else, most of my valuation is on things like energy storage, something nobody’s talking about as a huge opportunity for them. And also autonomy — If FSD works. Now it’s a software business with the software multiple," Narayan elaborated, suggesting that Tesla's valuation could benefit greatly from its advancements in these areas.

Market Sentiment

The broader analyst community exhibits a range of views on Tesla, with 17 analysts offering a buy or overweight rating, and an average price target of $198.87, representing a 19.4% potential upside. This diversity in analyst opinions underscores the dynamic and evolving nature of Tesla's market position, with significant growth prospects on the horizon.