Tag: Piper

Investing.com — Tesla continues to be Piper Sandler’s “#1 buy-and-hold idea,” as the firm raised its price target for the stock from $315 to $500. 

The firm’s analysts believe investors are beginning to appreciate Tesla (NASDAQ:)’s potential in “real-world A.I.,” which is driving portfolio managers to consider upside scenarios more seriously.

In their recent note, Piper Sandler said it curated over a dozen Tesla-specific datasets. 

Despite uncertainties surrounding near-term financials, particularly vehicle deliveries and automotive gross margins, the long-term outlook is said to remain promising.

“We expect Tesla to deliver 1.96M units in 2025 (vs. 1.79M in 2024), but we expect >100k incremental units to come from unknown vehicles, and another 70k incremental units from Cybertruck,” noted Piper Sandler. 

However, they caution that this forecast is uncertain and potential downside may not become evident until later updates.

On the gross margin front, Piper Sandler maintains a more positive outlook, expecting solid post-quarter performance as long as Tesla stays on track with new product launches.

Looking ahead, Piper Sandler adjusted its long-term delivery expectations, now predicting Tesla will max out at around 4.6 million units per year by 2032. 

The focus, they believe, will shift from launching new cars to popularizing full self-driving (FSD) software. 

“We are now modeling a contribution from FSD licensing,” the analysts stated, with Tesla’s existing businesses valued at just below $300 per share, inclusive of FSD.

For valuation, Piper Sandler is transitioning to a P/E-based methodology, with their $500 price target based on 120x FY26E EPS. 

They anticipate that within a year, investors will gain greater clarity on Tesla’s product cadence, allowing a focus on more ambitious topics like FSD efficacy and Tesla’s broader A.I. ambitions.