Tesla today
(as of 11/27/2024 06:16 PM ET)
- 52-week range
- $138.80
▼
$361.93
- P/E ratio
- 91.20
- Price target
- $231.06
Tesla Inc. NASDAQ: TSLA The stock is up 56.2% since Donald Trump was elected President of the United States. But with a recent move of 6.6% in the week of November 18, 2024, investors are thinking the stock could hit $400 or even higher.
News broke that the Trump administration plans to prioritize creating a regulatory framework for fully self-driving vehicles (ie, autonomous vehicles) at the federal level as opposed to leaving it up to individual states.
The significance for Tesla is that a federal framework could provide an easier path for Tesla to roll out its autonomous CyberCabs. For existing Tesla owners, it will create a process to sell the software across state lines.
Tesla’s drive towards an autonomous future
It’s no secret to TSLA shareholders that Tesla founder and chief executive officer (CEO) Elon Musk has made autonomous technology and AI development a cornerstone of Tesla’s business strategy going forward. In theory, this news makes Musk’s vision more likely to become a reality.
But investors wonder how long that might take, especially for a stock that’s trading at 171x forward earnings. Four years can be quite long. A Trump administration is likely to make standards for autonomous driving less restrictive. Tesla’s fully self-driving (FSD) technology is currently at Level 2 and will likely only achieve Level 4 before receiving regulatory approval for its CyberCabs.
Musk keeps winning
Another piece of news that’s helping to boost TSLA stock is that the incoming Trump administration is widely expected to repeal the Biden administration’s $7,500 EV tax credit. It was put in place to encourage electric vehicle (EV) adoption in the United States. However, ending the subsidy was one of Trump’s key campaign promises.
Here again, Tesla will likely be a beneficiary due to the company’s position in the US EV market. That is, it is the market share leader and one of the only companies that is profitable. This puts the company in a position to produce EVs at a lower cost, which would negate the current subsidy.
Politics make strange bedfellows
Some critics suggest that recent successes can be attributed to Elon Musk’s endorsement of the Trump campaign. Musk, previously popular among the political left, has drawn attention for his evolving views on topics such as free speech.
You can’t buy shares in a person, but at least some of the bullish sentiment in TSLA stock since the election has investors using Tesla as a proxy for their belief in what the next four years mean for Tesla’s idea to improve. will be That it is more than a car company and should be worth the same as others Technology stocks. It is, but it is not yet visible in the financials.
Buy rumors, sell news
After closing at around $347 on November 18, Tesla’s stock has traded down to around $329 but has recouped much of that loss. This was to be expected as investors digested the rumor and realized that any news payoff this week was still years away.
Tesla stock forecast today
$231.06
-30.59% declinecatch up
Based on 39 analyst ratings
| High forecast | $400.00 |
|---|---|
| Average forecast | $231.06 |
| Less predictable | $24.86 |
Analysts have been raising their price targets for TSLA stock since the company’s earnings report in October. However, it wasn’t until the latest news that Dan Ives, an analyst at Wedbush, stuck his neck out and is now calling for Tesla stock to climb to $400. That would be 16% more than the price as of this writing. This is specifically a 73% gain from the consensus price Analyst predictions at MarketBeat.
In the final analysis, an investment in Tesla right now is an investment by proxy in Elon Musk. Musk’s star may never shine bright, but like all stars, it will fade over time. Tesla has always been a heavily traded stock, and that is likely to continue. Whether the Musk Factor is worth paying 171x forward earnings for TSLA stock as an investment is a question only you can answer.
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