1. Tesla’s Recent Performance
Tesla Inc. stock declined by 2.48% on Monday, closing at $262.51, despite a favorable day for the broader stock market. While the NASDAQ Composite and Dow Jones Industrial Average gained 0.26% and 0.65%, respectively, Tesla’s fall broke a two-day winning streak. The stock remains just $8.49 below its 52-week high of $271.00, reached in July 2023. Trading volume surged to 103.5 million shares, well above its 50-day average of 79.9 million, indicating heightened investor activity and interest.
2. Gary Black’s Adjusted Price Target
Gary Black, Managing Partner at The Future Fund LLC, raised his 6-12 month price target for Tesla to $300, up from $270, while projecting a long-term target of $600 by 2030. Black’s upward revision reflects an improved earnings outlook for Tesla, with an adjusted 2030 EPS forecast of $16, based on a price-to-earnings growth (PEG) multiple of 1.5x and a 25% expected EPS growth rate. He cites rising FY'25 earnings estimates and higher auto gross margins as primary factors behind this target increase.
According to Black, Tesla’s adjusted earnings per share estimates for FY'24 and FY'25 stand at $2.40 and $3.60, respectively, slightly ahead of Wall Street’s consensus of $2.38 and $3.22. Black’s price target revision underscores his belief in Tesla's strong delivery growth and profitability potential.
3. Tesla’s Valuation and Market Sentiment
The average Wall Street target for Tesla remains around $227, meaning Tesla’s current price has a $42 per share gap from this target. This discount between Tesla’s market price and target price is close to its largest since June 2023. Black noted that his fund had reduced its Tesla position in September 2022 when shares traded around $280, a decision he describes as prudent given the subsequent stock volatility.
Tesla’s Q3 earnings also beat expectations, reporting an EPS of $0.72 compared to analysts’ forecast of $0.58, which has provided additional support for Black’s bullish outlook. Tesla CEO Elon Musk recently remarked on the stock’s volatility, drawing parallels to Warren Buffett’s “rollercoaster” analogy about market fluctuations, highlighting the challenges of navigating Tesla’s price movements.
4. Diverging Analyst Opinions and Market Risks
While Black and some analysts remain optimistic, others hold a more cautious view. A high-accuracy analyst recently predicted an 11% downside for Tesla, reflecting the varied opinions surrounding Tesla’s prospects. Factors such as continued price cuts in the EV sector and competitive pressures add to the uncertainties.
5. Conclusion
Tesla’s recent performance reflects both market volatility and investor uncertainty, despite a generally positive earnings season. With Tesla remaining a popular stock, the range of price targets—from Black’s optimistic $600 by 2030 to short-term bearish outlooks—indicates that Tesla will continue to be a focal point for both growth-oriented and risk-sensitive investors. Whether the stock can sustain growth hinges on its ability to maintain profit margins and delivery expansion, along with broader economic factors impacting consumer demand and the EV market.
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