According to a report, Baird analyst Ben Kallo raised the target price to $548 from $320, exceeding the $500 target set by Wedbush.
Tesla Inc. (TSLA) stock gained 1.1% in premarket trading on Friday after Baird upgraded the stock to ‘Outperform’ from ‘Neutral’ and set the highest price target on Wall Street for the Elon Musk-led electric vehicle maker.
According to a electric-vehicles.com report, Baird analyst Ben Kallo raised the target price to $548 from $320, exceeding the $500 target set by Wedbush. The new price target implied a 31.5% upside compared to the stock’s previous closing price.
Retail sentiment on Stocktwits about Tesla was in the ‘extremely bullish’ (85/100) territory at the time of writing, while retail chatter was ‘extremely high.’
Kallo reportedly stated that there were “relatively muted stock reactions following a series of less than stellar quarters.” Despite that, “investor inbounds regarding long-term initiatives lead us to believe focus has increasingly shifted to the future for TSLA.”
The Baird analyst also pointed out that the recently proposed pay package for Musk is “built on lofty targets.” The company’s board has proposed a $1 trillion pay package for Musk over the next decade, contingent upon the company achieving specific milestones, including increased earnings, vehicle deliveries, robotaxis, and humanoid robots, as outlined in the proposal.
Musk has also signaled that he remains focused on his businesses and provided a detailed breakdown of his work schedule on Monday, noting that he has held back-to-back meetings across all Tesla departments with a particular focus on “AI/Autopilot, Optimus production plans, and vehicle production/delivery.”
Kallo reportedly noted that the company is being increasingly viewed as the “leader in physical AI” as it gears up for a wider rollout of electric vehicles and displays progress on the production of Optimus humanoid robots.
Tesla’s stock has gained about 7% this year, underperforming the broader markets, as investors’ confidence was jolted earlier this year due to falling sales and Musk’s involvement in politics as part of President Donald Trump’s administration.
On Thursday, Goldman Sachs raised its third-quarter estimate for vehicle deliveries to 455,000 from 430,000, exceeding the consensus of 439,000. The brokerage attributed the better second-half delivery volumes in part to the recent Model Y L Launch in China, better consumer survey data, and in part to the expiry of the federal tax credit on the purchase of EVs on Sept. 30. Tesla has urged customers to buy the vehicles before the end of the month to avoid paying a higher price later.
However, Baird’s Kallo warned that “near-term fundamentals will be choppy” as sales are expected to decline in 2025.
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