The Tesla (NASDAQ:TSLA) share price forecast presents a mixed picture, with analysts offering a wide range of predictions. Based on 34 analysts providing ratings in the past three months, the consensus is Hold. And there’s a fairly even split between Buy, Hold, and Sell recommendations.
Analyst consensus and price targets
The average 12-month price target for Tesla stock is $320.9, representing a discount of 18.6% from the current price of $394.4. However, there’s a significant disparity between the highest and lowest forecasts. The highest price target is $515, while the lowest price target is just $24.86.
Bullish perspectives
Several analysts maintain optimistic outlooks for Tesla despite the surging share price. This includes:
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- Wedbush’s Daniel Ives reiterated a Buy rating with a $515 price target. He says the stock’s currently undervalued 30.6%
- New Street’s Pierre Ferragu upgraded Tesla to Buy with a price target of $460. This suggests the stock may be discounted by 16.6%
- Stifel Nicolaus’s Stephen Gengaro raised the price target to $492, implying 24.8% potential share price growth
These bullish analysts often cite Tesla’s leadership in artificial intelligence (AI) and autonomous driving technology as key growth drivers. One of the most bullish forecasts — which isn’t included within consensus data — comes from Ark Invest, led by Cathie Wood. Wood is a perennial backer of Elon Musk’s ventures. And in 2024, Ark issued a share price target of $2,600 by 2029. Wood’s team claims this would be driven by rapid adoption of Tesla’s robotaxi and the deployment of humanoid robots.
Bearish views
On the other hand, some analysts remain sceptical about Tesla’s ability to satisfy its current valuation. This is around 160 times forward earnings and a price-to-earnings-to-growth (PEG) ratio of 19. These include:
- GLJ Research’s Gordon Johnson — a critic of Tesla stock for some time — maintains a Sell rating. It has a very low price target of $24.9, suggesting the stock’s currently overvalued by 93.7%
- JP Morgan‘s Ryan Brinkman recently reiterated a Sell rating with a $135 price target, implying a 65.8% overvaluation.
Bearish analysts often point to increased competition in the electric vehicle (EV) market and concerns about Tesla’s valuation. They’re also typically hesitant to assign value to Musk’s long-term plans for autonomous driving and the rollout of the Optimus robot.
The bottom line on Tesla
As I noted in a recent article about Tesla, Musk’s plans for the company are quite incredible. It’s not just about EVs either. The end goal includes sending Tesla Cybertrucks and robotics to Mars to set up colonies. And this can make the stock quite hard to value.
However, in the near term, it continues to generate most of its income from car sales. These were impacted by economic fluctuations and actually went into reverse in 2024. Some analysts are also wondering if Musk’s political meddling may slow sales further.
There’s a lot to unpack with Tesla. Personally, I’m not investing in the stock, but I’m not going to bet against Musk. If anyone’s going to turn a car company into a planetary coloniser, it’s him. So bold investors might want to consider it.
