The march of Tesla's (TSLA) stock toward $400 continued. It only needed bullish commentary from B of A Securities analysts to boost the stock.
Analysts at BofA visited Tesla’s Giga Austin factory. The firm now believes that Tesla will grow in 2025 and beyond. Its core EV business will grow, while the robotaxi launch will lift its revenue. Additionally, its investments in Optimus will pay off. Analyst John Murphy set a $400 price target, up from $350.
Risks:
Oil prices are now under $70/bbl (at $68.43). This vastly increases the attractiveness of gas-powered vehicles. Expect oil prices to fall even more in 2025. With tax credits absent for Tesla vehicles, consumers will opt for cheap vehicles instead.
Buy Cheap Auto Stocks
Struggling auto manufacturers like Stellantis (STLA) are a worthwhile value bet. Stellantis (STLA) trades at a P/E of 83 times. Ford (F), whose stock peaked at $11.50, closed at $10.44. General Motors (GM) recently admitted that China’s economic problems weighed on its business.
On December 4, 2024, GM took a $2.6 billion to $2.9 billion charge. It is writing down its joint venture with SAIC, a local Chinese firm. It is recognizing a material loss in the value of the unit.
Investors may be tempted to speculate on Lucid Group (LCID) or Rivian (RIVN). That is a high-risk trade: LCID stock has a 33% short float while RIVN stock’s short float is 20.28%.
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