Tesla (TSLA 1.13%) has long been a battleground stock, but recently, the fight between bulls and bears around the EV maker has reached a fever pitch.
Shares of Tesla essentially doubled following the election, but they have given back all of those gains since the inauguration as controversy continues to follow CEO Elon Musk, who has now tasked himself with laying off federal workers as the head of the Department of Government Efficiency (DOGE). Negative headlines have battered Tesla stock as sales in Europe appear to be plunging, and the company has faced outbursts of vandalism and protests in the U.S.
While the near-term picture for Tesla might look gloomy, the company is preparing to launch its robotaxi next year, an innovation that could be a game-changer, and Tesla’s preparation has earned it an endorsement from a key Wall Street analyst.
Image source: Tesla.
Cantor Fitzgerald upgrades Tesla
On Wednesday, Cantor Fitzgerald lifted its rating on Tesla stock from neutral to overweight, according to media reports, and gave it a price target of $425, implying potential upside of 82% from its current price.
Cantor’s visit to the company’s CortexAI data centers and its production lines has given it more confidence that it will launch its robotaxi service in June as it cited “upcoming material catalysts” in its upgrade note.
Is Tesla a buy?
Rolling out the robotaxi service in June would be a clear win for Tesla, especially after Musk has talked up the concept for years, but it’s a mistake for investors to overlook the real challenges that the brand is facing and the plateauing growth in the business that had started before Musk’s foray into politics.
Even after falling 50%, Tesla stock still seems to be priced based on future innovations like the robotaxi, meaning investors are expecting it to be successful. Meanwhile, analysts have slashed earnings estimates for this year and next, and Wall Street now expects just 13% revenue growth from the company this year.
While the robotaxi may be on track, skepticism for Tesla stock amid its brand crisis is warranted.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
