Why this Wall Street analyst still thinks Elon Musk's EV maker could nearly rise 90%

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Tesla stock: Why this Wall Street analyst still thinks Elon Musk's EV maker could nearly rise 90%

investing ideas :: 15hrs ago :: source - yahoo finance

By Brian Sozzi

President Donald Trump and Tesla CEO Elon Musk, along with his son X Æ A-Xii, speaks to reporters by a Tesla vehicle on the South Lawn of the White House Tuesday, March 11, 2025, in Washington. (Pool via AP) · ASSOCIATED PRESS

Tesla (TSLA) clearly still has one very enthusiastic supporter left on Wall Street.

Emphasis on very enthusiastic.

Shares of the Elon Musk-led EV maker rose nearly 2% to $239.77 on Thursday after Piper Sandler analyst Alexander Potter reiterated his Overweight rating. Potter set a new $450 price target, down from his previous $500 projection, still implying nearly 90% upside from current levels.

"Yes, TSLA is still Overweight rated. The drama is nothing new (and neither is the volatility) — it's just that the stakes are higher. TSLA's now back to its pre-election valuation. Remember: this isn't the first time TSLA has doubled and subsequently gotten cut in half, and it likely won't be the last. In our view, nothing has changed re: Tesla's ability to remake the world's transportation and energy markets," Potter writes, as if to sense the inquisitive looks on client's faces with the uber bullish call.

He did follow several other peers on the Street, however, by cutting his delivery forecast on Tesla for 2025. "Politics aren't to blame" for Tesla's weak sales trends right now, Potter says.

Watch: How Elon Musk delivers on his big goals

To be sure, the bears have been in control of the wheel as it pertains to Tesla’s stock price for most of 2025.

Shares are down 35% in the past month and 41% year to date. It's the worst-performing member of the closely watch Magnificent 7 complex.

There continues to be a lot of explanations for the unwinding of the Tesla bull trade.

The demand outlook remains weak, as Potter and other analysts have noted while cutting their delivery estimates. The latest sign of this comes from China, where Tesla is reportedly offering 0% APR on the Model Y to boost sales.

In February, Tesla sold just 26,677 vehicles in China, an 11.16% drop year over year and a 20% decline from January, according to the China Passenger Car Association. Meanwhile, Australia's Electric Vehicle Council reported a 72% year-over-year drop in Tesla’s overall sales for the month

At the same time, Australia's Electric Vehicle Council reported that Tesla's overall sales fell 72% year over year in February.

In the US, prices on used Cybertrucks, Model 3s, Model Ss, Model Ys, and Model Xs continue to drop. Tesla is facing increased EV competition from General Motors (GM) and Ford (F), while some consumers are opting for hybrids.

Wall Street more broadly continues to sour on the stock.

Mizuho cut its delivery numbers on Tesla this week, citing changing geopolitics – a nod to Elon Musk’s involvement with the Trump administration. That involvement has thrust Tesla into a different type of limelight with Musk detractors allegedly vandalizing Tesla dealerships and charging stations across the country.

Listen: Is Tesla stock oversold on the charts?

And three, Tesla insiders are selling a ton of stock – more than $100 million in more than a month according to insider selling activity data on Yahoo Finance.

"While the long-term story at Tesla has shifted to AI (robo-taxis and humanoid robots) and progress there continues, we believe these are longer dated opportunities that the premium multiple already (more than) considers. Stock is currently trading at 90x P/E on consensus (EPS) estimates for 2025, but again we believe that is too high," UBS analyst Joseph Spak wrote.

UBS analyst Joseph Spak said in reiterating a Sell rating on Tesla with a $225 price target last week.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.