Tesla stock has a new target increase and its best month in a year

Analyst Canaccord Genuity raised the target price of Tesla shares, allowing their growth by more than 10%. At the same time, since the beginning of September, the company's securities have already risen by 33%, showing the best return since last year's presidential election. However, Wall Street is already wondering what will happen to the quotations if Tesla's sales decline after the end of tax incentives in the United States.

Canaccord analyst George Gianarikas raised his target price for Tesla shares from $333 to $490, writes Barron's. The new target is 10.5% higher than the closing price on September 29. The analyst maintained his recommendation to buy Tesla securities, although, according to him, he had previously considered the possibility of downgrade.

"In early January, we issued a research note looking at the same downgrade scenario and fixed our internal doubts... We ended up maintaining a 'buy' rating. And despite the volatility since then, we are glad we did," Gianarikas wrote in the note.

The analyst maintained a positive view on the stock as he expects strong third-quarter deliveries. He also noted the release of new electric vehicle models, the growth of its energy storage business and Tesla's prospects in artificial intelligence, including robotaxis and humanoid robots.

According to FactSet, the average analyst target price for Tesla shares is now around $347 - $33 higher than it was a month ago. However, that's still below the current market price, which is not unusual for Tesla: historically, its shares have often traded above average analyst estimates, Barron's notes.

Quotes were roughly in line with the average target price in early September, but then went sharply higher. This month, they are up 33% - the best result since November 2024, when the stock jumped sharply after the election of President Donald Trump. At the time, investors expected Tesla CEO Elon Musk's involvement in Trump's election campaign to benefit the company.

As a result, September could be one of the top 10 best months in Tesla stock history. To do that, the stock needs to end trading above $461.24 on Tuesday, Barron's calculated. At the time of publication, the stock was trading almost 4% below that level.

The best month for Tesla securities remains May 2013, when the stock rose 81%.

Tesla will report third-quarter sales this week. Wall Street expects a surge in sales as buyers in the U.S. were able to take advantage of a tax credit of up to $7500 for electric car purchases until Sept. 30. But going forward, they said electric car sales are likely to decline significantly, Bloomberg writes.

"Tesla's stock is trading at an exorbitant multiple, its earnings are shrinking amid weakening demand for electric cars and fierce competition, and tax credits for electric vehicles are set to expire soon, further hitting sales," Irene Tankle, chief U.S. equity market strategist at BCA Research, told Bloomberg. The stock rally could continue "through inertia," she said, but for now, private investors are buying the "dream" of a world of robots and unmanned cars that Musk is "selling."

"Tesla's core business is worth $150 a share," agrees Gerber Kawasaki Wealth & Investment Management CEO and longtime Tesla investor Ross Gerber. - Anything investors pay above that amount for robotaxis and robots is "Elon hyperbole."

This article was AI-translated and verified by a human editor