Deutsche Bank resumed coverage of the U.S. auto industry and named Tesla a top pick in the process. Analyst Edison Yu reinstated Tesla with a buy rating and price target of $295, which indicates 36% upside from Monday’s close. Although the stock is down nearly 10% in 2024, it has outperformed the broader market quarter to date with a gain of more than 9%. TSLA .SPX YTD mountain Tesla versus the S & P 500 in 2024 According to Yu, Tesla is more of a technology company “attempting to reshape multiple industries, deserving of a unique type of valuation” than a traditional automaker. “Tesla is in a league of its own and represents our highest conviction secular leader,” Yu wrote in a research note Monday. “Long-term, Tesla is an emerging leader in autonomous driving (robotaxi) and humanoid robots (Optimus) … which represent some of the most clear and lucrative applications of end-to-end AI.” Tesla said last week it would launch its full self-driving service in Europe and China in 2025. In June, CEO Elon Musk claimed Optimus robots could make Tesla a $25 trillion company one day. The company’s energy storage business presents another promising growth opportunity, according to Yu. He forecast net $13 billion in sales, according to Yu. “Near-term, automotive deliveries/margin have indeed been softer but we view this as temporary ahead of new models/refreshes coming in the pipeline,” Yu said. The company already has brand recognition worldwide and is already a preeminent battery electric vehicle manufacturer, the analyst said.
