Wedbush Securities revised its outlook on Tesla Inc (NASDAQ:) on Tuesday, raising its price target from $275 to $300. The firm maintained its Outperform rating on the electric vehicle giant’s stock. Additionally, Wedbush presented a more optimistic scenario, setting a “bull case” price target of $400 for the year 2025.
The revision follows Tesla’s announcement of better-than-expected second-quarter deliveries, which the company calls a pivotal moment for the company. Wedbush believes this signals a significant shift in Tesla’s demand trajectory, especially after a rocky start to the year.
According to the company, Tesla’s recent price cuts have now largely been overcome and global demand for electric vehicles is stabilizing, with China as the dominant market. Wedbush expects Tesla to continue to gain momentum and is on track to reach an annual production rate of 2 million units in the coming quarters.
The positive adjustments are based on the belief that Tesla will benefit from easier comparatives in 2025, supporting its growth narrative. Wedbush’s commentary underscores the expectation that Tesla’s performance in the second half of 2024 and 2025 will mark a “major inflection point” for the company.
The price target increase and maintenance of the Outperform rating reflect confidence in Tesla’s ability to weather current market conditions and achieve its long-term production and delivery goals.
In other recent news, Tesla’s second-quarter deliveries slightly beat consensus expectations, hitting 444,000 units, up 1.7% from the FactSet consensus and up 1.5% from the company’s own estimates. However, the delivery numbers represented a 5% decline from the prior year. Truist Securities maintained a Hold rating on Tesla shares with a $162.00 price target, while Citi reiterated a Neutral rating on Tesla shares with a $182.00 price target.
Tesla’s production for the quarter was about 7.5% lower than deliveries, totaling 410,800 units, down about 14% from the same period a year earlier. Despite this, Tesla said it beat its second-quarter delivery forecast, shipping a total of 443,956 units, up 14.8% from the first quarter.
Polestar, on the other hand, reported a first-quarter operating loss of $231.7 million due to significant tariffs on its electric vehicles produced in China. The company is planning measures to mitigate these impacts, including adjusting its production strategy to reduce its dependence on Chinese production.
Meanwhile, Tesla’s sales of China-made electric vehicles fell 24.2% year-on-year in June. In contrast, Chinese automaker BYD posted a substantial 21% increase in EV sales in the second quarter, signaling an increasingly tight race with Tesla. These are some of the recent developments in the EV industry.
InvestingPro Insights
In light of Wedbush Securities’ revised outlook for Tesla Inc (NASDAQ: TSLA), it’s worth noting a few key insights from InvestingPro that may be of interest to investors. Tesla’s balance sheet strength is highlighted by the fact that it holds more cash than debt, providing financial flexibility in a dynamic market environment. Additionally, Tesla’s significant return over the past week aligns with Wedbush’s optimism about the company’s demand trajectory and production goals.
InvestingPro data reflects Tesla’s solid market cap of $734.25 billion, with a P/E ratio of 53.27, suggesting a high valuation by the market. Despite a -8.69% decline in quarterly revenue, the company’s revenue growth over the last twelve months remains positive at 10.12%. This data paints a picture of a company that, despite facing valuation and growth challenges, continues to maintain a strong market position and growth potential.
For investors who want to dive deeper into Tesla’s financials and future prospects, InvestingPro offers additional insights. There are 20 more InvestingPro tips, which provide a comprehensive analysis of Tesla’s financial health and market position. Interested investors can use the coupon code PRONEWS24 to get up to 10% off an annual Pro subscription and an annual or biennial Pro+ subscription, which grants access to these valuable insights and more detailed metrics.
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