Goldman raises price target on Tesla but still sees the stock declining

Goldman Sachs maintained a neutral rating on Tesla but raised its price target to $395 from $300, citing higher market multiples and anticipated long-term growth in autonomy and robotics, projecting EPS could reach $20 by 2030. However, this updated target still implies a 7% potential downside from current levels over the next 12 months, despite expectations for improved Q3/Q4 delivery volumes following a 14% Q2 decline.

Analysis

Goldman Sachs has maintained its Neutral rating on Tesla but increased its 12-month price target to $395 from $300, reflecting higher market multiples and an optimistic long-term growth outlook. This revised target, however, still suggests a potential 7% downside from the stock's recent closing price, underscoring a valuation concern following a 90% rally over the past six months. The bank's long-term optimism is predicated on Tesla's ability to capture outsized market share in future-facing sectors like humanoid robotics and autonomy, projecting a potential earnings scenario of $20 per share by 2030, well above the baseline $7-$9 estimate. This bullish outlook is tempered by explicit risks, including intensifying competition that is already compressing profits in China's ADAS market and general execution risk. In the near term, the analyst anticipates a rebound in vehicle deliveries for the second half of the year, a reversal from the 14% year-over-year decline in Q2, driven by the Model Y L launch and a pull-forward effect from expiring U.S. inflation reduction credits. The divided sentiment is mirrored across Wall Street, with LSEG data showing a nearly even split between buy and hold ratings.

Key Decisions for Investors

• Given the stock's 90% run-up and a price target implying a 7% downside, current holders should consider the significant near-term valuation risk and the potential for a pullback from current levels.
• Long-term investors should focus on Tesla's execution in autonomy and robotics, as the realization of the bullish $20 EPS target for 2030 is contingent on the company dominating these nascent markets.
• Monitor upcoming Q3 and Q4 vehicle delivery reports, as the expected rebound from Q2's 14% decline could serve as a key near-term catalyst or a point of failure for the current narrative.
• Investors should be cautious of the competitive risks highlighted in the ADAS market in China, as any erosion of profitability in this area could signal broader margin pressures for Tesla's future ventures.