Electric Vehicle (EV) company Tesla (TSLA) has received a massive price target increase from five-star Goldman Sachs analyst Mark Delaney. The analyst raised the firm’s price target for TSLA shares from $250 to $345. While this is a major boost, investors will note that it still represents a potential downside of 13.96% for the EV company’s shares.
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While Delaney increased his price target for Tesla, the analyst only reiterated a Neutral rating for the company’s stock. That makes sense, as the updated price target still represents a potential negative over TSLA’s current share price. Even so, investors are excited about the news, with Tesla stock gaining 1.45% as of this writing.
What’s Behind the TSLA Price Target Increase?
The Goldman Sachs analyst raised his price target for TSLA shares due to market sentiment concerning the company. He believes it’s switching to “a more forward-looking approach to Tesla,” largely due to the EV maker’s artificial intelligence (AI) potential.
AI has been booming lately, with many companies tied to it experiencing major gains in their share prices. Considering that Tesla CEO Elon Musk is closely tied to AI throughout his various companies, it’s reasonable to believe that EV manufacturers could also benefit from it. New progress on that front shows Tesla’s Optimus robot navigating difficult terrain.
Explaining why Tesla didn’t get a bigger boost to its share price or rating, Delaney notes that the EV maker faces several headwinds, including lower deliveries and auto gross margins. This resulted in the analyst decreasing his EPS estimates for the company.
Is TSLA Stock a Buy, Sell, or Hold?
Looking at the rest of Wall Street, the analysts’ consensus rating for Tesla is Hold based on 12 Buy, 13 Hold, and nine Sell ratings over the last three months. With that comes an average price target of $267.79, a high of $450, and a low of $24.86. This represents a potential 33.22% downside for TSLA shares.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
