Investing.com — Tesla Inc. (NASDAQ:)’s recent unveiling of its long-awaited robotaxis has left investors perplexed, with Jefferies saying the lack of clarity on the technology will push the electric vehicle maker’s core business He said his focus has returned.
Jefferies raised its price target on the company from $165 to $195, keeping the stock at “neutral,” citing expectations for increased cash flow over the next two years.
However, brokerages raised concerns about Tesla’s governance and medium-term funding prospects.
Jeffries said the company’s CyberCab announcement was “a bit dull”, with no “tangible advances” in the technology and few details of how it plans to generate revenue through it. This has refocused the company on its core automotive business, which has been plagued by delivery delays and is expected to record its first annual decline in deliveries in 2024.
“Tesla remains an attractive company in terms of innovation and momentum, but now more than ever it is facing a disproportionate share of the company that is funded solely by its auto business, which is under pressure,” Jefferies analysts said in a note. It looks like a VC portfolio.”
The company is scheduled to report third-quarter results after the bell Wednesday. Tesla stock fell in early October after a disappointing robotaxi announcement and lower-than-expected third-quarter deliveries.
Jeffries noted that the electric vehicle lead that Tesla initially had over traditional automakers has now stalled, and Chinese competitors are catching up.
Jeffries said the company faces “slower growth” for at least two years as its flagship model ages and it struggles to update its car catalog.
