Tesla’s (NASDAQ: TSLA) Robotaxi Day, titled ‘We, Robot’ is just hours away at press time.
Tesla CEO Elon Musk will take to the stage at 7 p.m. Pacific / 10 p.m. Eastern time in an event that many expect will feature several pivotal announcements for the automaker’s future.
Unsurprisingly, many are optimistic — Dan Ives of Wedbush, one notable TSLA bull, sees a $1 trillion valuation for Tesla in the long term on the merits of full self-driving (FSD) and AI alone — saying that this could end up being its ‘iPhone moment’.
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Ives recently set a $300 price target, arguing that successful Robotaxi adoption would fully shift Tesla from an automaker to a broad-based tech company and significantly expand its revenue streams.
At press time, TSLA is trading at $242.44 — the stock is down 2.41% year-to-date (YTD), although it has managed to rally by 50.3% over the last six months.
Delays and investor skepticism
Musk is, self-admittedly, ‘the boy who cried full self-driving.’ The company’s founder has a long history of making lofty, ambitious promises with unrealistic deadlines — only to fail to meet them, delay them habitually, and repeat the routine again.
This history of overpromising is by no means short — in 2014, Musk assured investors that Tesla cars would be ‘90% autonomous by 2015’. This was followed by the promise of an automated trip from Los Angeles to New York in 2017, and a repeated claim that vehicular autonomy would be reached in 2019 — both of which failed to materialize.
Even this event was postponed, having originally been slated to take place on August 8.
This has understandably led to reduced expectations among analysts — even notable bulls like Deepwater’s Gene Munster now foresee that 3 to 5 years will be required to gain full regulatory approval. Even so, setbacks are possible if not likely, particularly in light of the suspension of GM’s autonomous Cruise unit in November 2023.
Still, Munster remains bullish — although even he cautioned investors not to ‘expect many details at next week’s Tesla event’. The analyst has also hinted that TSLA could reveal as many as 3 new vehicle models at the event.
Mixed price targets ahead of Robotaxi Day
Consensus is far from bullish regarding the automaker.
Truist Securities, focusing on Tesla’s latest delivery report, raised price targets from $215 to $236 — although a ‘Hold’ rating was reiterated. In much the same vein, Goldman Sachs reiterated a ‘Hold’ rating with a price target of $230.
Other equity analysts are strongly bearish — Gordon Johnson of GJL Research predicts that the stock will crash to just $22 — while Guggenheim and HSBC both issue ‘Sell’ ratings with price targets set at $134 and $124, respectively.
Perhaps the most realistic assessment was given by Oppenheimer analyst Colin Rusch, who expects a robust showcase that will nonetheless see both bears and bulls find validation for their theses.
Another delay would do little to deter the Tesla faithful but is unlikely to cause sustained corrections to the downside — while skeptics will judge anything other than a blowout in terms of advancement to be business as usual. Only a decidedly strong showing would see far-reaching effects and reevaluations on the part of investors.
