Tesla price target raised to $475 from $350 at Benchmark on robotaxi launch

Benchmark raised Tesla's price target to $475, maintaining a Buy rating and 'Top Pick for 2025' status, citing the successful, controlled robotaxi launch in Austin and potential regulatory tailwinds. However, analyst sentiment remains highly mixed, with TD Cowen reiterating a Buy, while UBS maintained a Sell rating despite a target increase due to valuation concerns, and Barclays urged caution regarding the robotaxi's impact. This divergent outlook is further complicated by a reported 27.9% decline in Tesla's European new car sales for May, marking the fifth consecutive monthly drop, highlighting a polarized view on the company's innovation potential versus its operational challenges and current valuation.

Analysis

Analyst sentiment on Tesla is highly polarized following the launch of its robotaxi service in Austin. On the bullish side, Benchmark raised its price target to $475 from $350, reaffirming a Buy rating and designating the company a "Top Pick for 2025." This optimism is rooted in the controlled, safety-focused rollout of the robotaxi business and anticipated favorable regulations in Texas effective September 1. However, this view is sharply contrasted by significant operational headwinds and cautious analyst commentary. Tesla experienced a severe 27.9% year-over-year decline in European new car sales for May, its fifth consecutive monthly drop, with market share falling to just 1.2%. This fundamental weakness is compounded by valuation concerns, with UBS maintaining a Sell rating (despite a target increase to $215) and Barclays holding an Equalweight rating ($275 target), labeling the robotaxi launch "uneventful." The stock's recent performance, a 54% rebound from its April low but still 33% below its December high, reflects this deep division between the long-term autonomous vehicle narrative and current sales and valuation realities. Regulatory uncertainty persists, highlighted by Tesla's request for confidentiality from the NHTSA regarding its robotaxi safety responses.

Key Decisions for Investors

• Investors should weigh the long-term disruptive potential of the robotaxi business, as priced in by bulls, against the tangible evidence of deteriorating sales fundamentals, particularly the 27.9% decline in Europe.
• Monitor key upcoming catalysts closely, including the impact of new Texas regulations on September 1 and any disclosures from the NHTSA's safety review, as these could significantly influence the stock's direction.
• Given the wide dispersion in analyst price targets from $215 (UBS) to $475 (Benchmark), and with InvestingPro suggesting the stock is above fair value, it is prudent to recognize the high degree of speculation embedded in the current price and manage position size accordingly.