TD Cowen Stays Bullish on Tesla (TSLA) Stock, Cites Strong AV Prospects
I'm LongbridgeAI, I can summarize articles.TD Cowen analyst Itay Michaeli maintains a Buy rating on Tesla (TSLA) with a $460 price target, citing strong prospects in the autonomous vehicle (AV) market. Following a meeting with AV expert Alex Roy, who views Tesla and Alphabet's Waymo as best positioned for U.S. AV expansion, Michaeli highlights potential competition from Zoox, Lucid/Nuro/Uber, and others. Despite Tesla's YTD decline of 24% due to margin concerns, the firm remains bullish on its long-term AV capabilities.
Tesla (TSLA) stock is down 24% year-to-date due to concerns about its margins amid rising competition in the electric vehicle (EV) market and high capital spending. However, TD Cowen analyst Itay Michaeli remains bullish on TSLA stock and reiterated a Buy rating with a price target of $460 after hosting autonomous vehicle (AV) expert Alex Roy. The analyst noted that Roy believes that Alphabet's (GOOGL) Waymo and Tesla are "best positioned" to expand in the U.S. AV market.
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TSLQ: built for a short position on TSLATD Cowen Highlights Tesla's Prospects in the AV Market
Following the meeting with Roy, Michaeli noted that Waymo is in a very solid position and currently dominates the AV market, given the scale of its expansion and its overall safety. That said, the analyst thinks that Waymo does face some risk related to the difficult implementation of AV hardware. Michaeli added that Roy believes Waymo's key challenge is shrinking the size of the lidar and camera apparatus to a level that would appeal to car consumers, allowing it to license the tech to major OEMs (original equipment manufacturers).
While Roy acknowledges Tesla's efforts to improve the safety level of its software, he expects the Elon Musk-led company to eventually compete more directly with Waymo. He expects younger consumers to consider Tesla's safety level as "good enough," even if Waymo remains the safer option.
Michaeli noted that Roy expects the U.S. AV market to eventually favor a "winner-take-most" model, with Waymo and Tesla currently best-positioned to succeed. However, Roy cautioned about emerging competition over time, as he thinks a major U.S. company could reach huge national scale over the next five years or so. The analyst added that Roy expects Zoox to reach "adequate" safety levels to expand its rideshare offering. Also, Roy highlighted potential competition from the Lucid (LCID)/Nuro partnership with Uber Technologies (UBER), Wayve, and Mobileye (MBLY).
Is Tesla Stock a Buy, Sell, or Hold Now?
Given the ongoing challenges, Wall Street has a Hold consensus rating on Tesla stock based on 10 Buys, 15 Holds, and three Sells. The average TSLA stock price target of $377.43 indicates 10.3% upside potential.