Investment Update on Tesla Inc (NASDAQ: TSLA)

Baird has raised its price target for Tesla Inc from $280 to $480, citing robust growth prospects bolstered by cost reductions, new models, and favorable regulatory dynamics.

The analyst stated, "The stock has gained significant momentum and has several upcoming potential catalysts. We like the stock long term and would be buyers on pullbacks."

Since the U.S. presidential election, Tesla's shares have surged nearly 91%, significantly outperforming the S&P 500, which gained just 4.6%.

Baird is optimistic about Tesla’s outlook for 2025, highlighting potential regulatory fast-tracking for the Cybercab, the introduction of affordable vehicles, and CEO Elon Musk’s relationship with President-elect Trump.

The firm expects that Tesla’s cost-cutting strategies and enhanced factory utilization will drive growth, while regulatory credit sales may provide a consistent revenue stream, especially as competitors face production challenges.

However, risks include the potential removal of U.S. EV tax credits and geopolitical issues associated with Tesla's operations in Shanghai, along with concerns regarding Musk's ability to manage multiple responsibilities.

Baird’s price target increase reflects a premium valuation of 57 times the 2028 EBITDA estimates, discounted to 2025, based on Tesla's growth potential and favorable industry conditions.