Stock analysts at Cantor Fitzgerald, the firm long led by now-Commerce Secretary Howard Lutnick, upgraded their rating on Tesla Inc., the carmaker run by White House adviser Elon Musk.
Tesla’s shares are a buy after having fallen almost 45% this year, Cantor analyst Andres Sheppard wrote in a report to clients Wednesday, citing takeaways from a visit to the carmaker’s factory in Austin on Tuesday.
“The recent selloff represents an attractive entry point for investors,” Sheppard wrote, adding that Cantor is bullish about upcoming catalysts including Tesla’s plan to start offering a paid autonomous taxi-hailing service in the Texas capital in June.
Sheppard noted Bloomberg News’s report in November that members of then-President-elect Donald Trump’s transition team planned to prioritize crafting a federal framework for self-driving vehicles. He said Tesla would be “a major beneficiary” if this is implemented.
On the other hand, Sheppard cautioned that Trump’s tariffs and the likely removal of tax credits for electric-vehicle purchases could put a damper on Tesla’s growth. Other analysts have been lowering projections for the company’s vehicle sales this year, with some even expecting a second consecutive annual drop.
“We also expect a mild 1Q, driven by lower demand in Europe and increased competition in China, plus some negative sentiment from Elon’s polarizing politics,” Sheppard wrote.
Tesla shares rose as much as 4.3% before the start of regular trading and were up 3% as of 8:20 a.m. in New York. The stock got a temporary boost last week after Trump perused Tesla models parked outside the White House and told reporters he would buy one, but had given up those gains as of the close Tuesday.
Cantor maintained its $425 price target for Tesla shares, which the firm raised from $365 on Jan. 30, shortly after Trump’s inauguration. Sheppard is changing his tune after having downgraded the stock to the equivalent of a hold less than eight months ago, when his price target was $245.
Lutnick, 63, led Cantor Fitzgerald for decades before stepping down to join the Trump administration last month.
