Barclays has increased on Thursday its price target on Tesla by 27.3%, from $275 to $350, maintaining a bearish position on the stock and reiterating an ‘Equalweight’ rating.
On Thursday, and about a week before Tesla reports its quarterly earnings results (set for October 22), analyst Dan Levy wrote that he has a “muted view” on the company’s fundamentals going forward.
Based on Tesla‘s closing price on Wednesday ($435.15), the firm’s new target implies a downside of 19.6%.
A month ago, the analyst warned that investors should anticipate weaker sales volumes after a surge in demand in the third quarter, citing the expiration of the US EV tax credit and continued sluggish demand in Europe as key factors.
Levy stated that Tesla is entering third-quarter earnings “with two contrasting stories,” highlighting the “accelerating autonomous and AI narrative bolstered by Elon Musk’s proposed comp[ensation] package.”
Last month, and similarly to other analysts, Levy had noted that Tesla‘s narrative had been increasingly turned to its AI projects, while it remained unclear what attention would be given to vehicle volume.
The pay package plan is tied to a market capitalization of nearly $7.5 trillion and large-scale deployment of next-generation products, including 1 million Robotaxis in operation and 1 million Optimus humanoids delivered.
The analyst expects the company’s earnings per share (EPS) to beat consensus, “supported by gross margin and volume strength,” which has been reflected in the stock performance.
However, Levy is “leaning neutral to slightly negative” on the print.
According to Investor’s Business Daily, Wall Street analysts anticipate EPS falling 26% to $0.54, while revenue is projected to rise about 4% to nearly $26.3 billion.
Over the past three months, Tesla‘s share price has surged 34.8%, rebounding from earlier losses this year, when it hit a year-to-date low of $212 in April.
Earlier on Thursday, BNP Paribas initiated coverage on Tesla, with an ‘Underperform’ rating on the company’s stock and a bearish price target of $307.
As the market projects Tesla’s 2025 earnings to come about 55% from Robotaxi and Optimus, analyst James Picariello says it reveals the “extreme nature” of its current valuation.
