Two New Analyst Updates From TD Cowen and Barclays
Two new analyst updates to chew over. First, TD Cowen lowered the price target from $519 to $490 and kept a buy rating on the stock. Second, Barclays maintained an equal-weight rating on the stock, with a $360 price target. For reference, the price at the time of writing is about $389.
The nuance is important
Price targets and ratings are one thing, but the key for investors to focus on is the details of what Wall Street analysts are saying going into the first-quarter earnings. The TD Cowen analyst believes the risk of a lowered outlook is low, but that the lack of positive updates on the robotaxi rollout is a negative for sentiment over the stock. It’s hard not to disagree there, unless you take the approval of supervised full self-driving (FSD) in the Netherlands as a “win” for the future development of robotaxis in Europe.
Rising capital spending requirements
Meanwhile, the Barclays analyst believes the recent announcement of Terafab, Tesla’s semiconductor project aimed at securing its own semiconductor supply chain, could lead to a ramp in the company’s expected capital spending of about $20 billion in 2026.
Again, it’s hard to argue with the logic, so look out for questions about it during the earnings call.
The capital spending question is particularly relevant, as Tesla could tie up cash and inventory in producing Cybercabs before being able to deploy them in significant numbers. It’s a growing concern given the slow progress in robotaxi development.