June 27 - Benchmark analysts have reaffirmed Tesla (TSLA, Financial) as its “Top Pick” and lifted its price target to $475 from $350, reflecting growing confidence in the electric vehicle maker's robotaxi rollout.
The higher target implies an upside of about 46% from current levels. Analysts said the new valuation is based on Tesla's long-term earnings potential, with the firm assigning a multiple of 53.9 times its projected 2028 EBITDA, well above tech sector peers.
Benchmark's optimism follows Tesla's limited launch of its autonomous ride-hailing service in Austin, Texas. The firm said the company's safety-first approach could help build public and regulatory trust, especially with new state regulations on autonomous vehicles set to take effect Sept. 1.
While Alphabet's (GOOGL, Financial) Waymo may currently lead in autonomous rides, Benchmark argues Tesla's strategy could prove more scalable, thanks in part to its cost-effective Model Y. Tesla ended Q1 with $37 billion in cash and $600 million in free cash flow, providing ample resources for growth.
Although TSLA shares remain down over 19% year-to-date, Benchmark expects improvement in the second half of 2025. The firm sees the company evolving from a traditional EV maker to a broader automation and robotics player.
Tesla's Q2 delivery results will be closely watched in the coming weeks.
