Tesla Inc. (NASDAQ:TSLA) shares are down about 19% this year, its auto business remains under pressure and Elon Musk’s biggest bets on robotaxis and humanoid robots are still largely unproven.
Wall Street is nevertheless becoming increasingly reluctant to recommend selling the stock.
Sell ratings now account for just 13.1% of the 61 analyst recommendations on Tesla, Bloomberg reported Thursday, the lowest share since April 2023 and down from 23.3% in January.
"There’s a bit of a ‘don’t bet against Musk’ vibe here," Max Gokhman, senior vice president at Franklin Templeton Investment Solutions, told Bloomberg.
Gokhman said Musk has shown that even after long periods of missed deadlines, ambitious projects can eventually materialize. Franklin Templeton owns Tesla shares.
The shrinking Sell camp does not necessarily mean analysts are turning bullish. Hold-equivalent ratings are at their highest share in more than two years.
Tesla also lost its latest Sell rating because longtime bear Colin Langan left Wells Fargo, prompting the bank to suspend coverage rather than upgrade the stock.
Why Tesla Bears Are Backing Away
The split comes down to how investors value Tesla.
Ivan Feinseth, partner and chief investment officer at Tigress Financial Partners, told Bloomberg that analysts are increasingly factoring possible future value from Tesla’s autonomy, robotics and AI businesses into the stock rather than judging it solely as an automaker.
Feinseth added that putting a higher valuation on those businesses also leaves Tesla with more to prove on revenue and profitability.
Prediction traders are more skeptical about how quickly one of those bets will become a commercial product.
Polymarket traders give Tesla a 7% chance of making Optimus available for public purchase or paid preorder by Dec. 31.
Faraday Future Chairman Jerry Wang recently told Benzinga that Optimus commercialization in 2027 is "very realistic," identifying software and training as the main barriers.
Tesla’s Car Business Faces Its Next Test
Tesla is expected to report third-quarter deliveries Friday.
Tesla’s company-compiled analyst consensus calls for 461,974 deliveries, down about 7% from 497,099 in the year-earlier quarter.
Kalshi traders are more optimistic, with a market-implied forecast of about 481,000 deliveries as of Thursday, though that would still fall short of the year-earlier quarter.
JPMorgan analyst Rajat Gupta cut his third-quarter delivery forecast to 482,000 from 516,000 this week and lowered his Tesla price target to $415 from $445, citing weaker U.S. and China vehicle trends. He maintained a Neutral rating. Even after the cut his call remains above consensus.
StoneX analyst Mickey Legg expects Tesla to deliver just 446,500 vehicles in the third quarter, below the company-compiled consensus, but reiterated a Buy rating and $475 price target last week.
Kalshi and Benzinga have an existing data collaboration agreement.
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