Benchmark has added Tesla (TSLA) stock to its “Best Ideas” list, signaling confidence in the stock despite its recent selloff. The investment firm argues that the market overreacted with the decline, suggesting that Tesla’s long-term growth prospects remain strong. With this, Benchmark analyst Michael Legg reaffirmed his Buy rating on TSLA stock. Although Legg lowered his price target from $475 to $350 due to negative market sentiment following tariff announcements, the upside potential remains strong at 58% from current levels.
Benchmark Calls Recent Selloff Overstated
Tesla’s stock has dropped sharply from its post-election high above $480, now hovering in the low $200s. Year-to-date, TSLA stock has declined by 45%. Legg sees this dip as a buying opportunity. He argues that the recent decline in stock price and sales is overstated, given the short-term challenges and the upcoming growth prospects.
Additionally, Legg views the expected release of a new vehicle in the second quarter as a potential catalyst to drive up Tesla’s deliveries. Legg also pointed out that Tesla is less affected by new U.S. auto tariffs due to its North American production being mainly in California and Texas, giving it an advantage over other automakers.
On the other hand, Benchmark pointed out several risks, such as political pressure, an aging product lineup, and growing global competition. However, it believes that challenges like political backlash may ease as the year progresses.
Benchmark Pins Hope on Autonomy and Robotics
Looking ahead, Benchmark stated that Tesla’s overall potential extends far beyond vehicles, which is a key factor in their positive outlook. It highlights Tesla’s ambitious plans for the Optimus robotics platform as a major growth driver, allowing the company to transition from a vehicle maker to a broader automation provider.
In the near term, Legg is excited about the launch of Tesla’s robotaxi service in Austin, Texas, set for June. While the service will begin on a smaller scale, he’s closely monitoring its expansion into other areas.
What Is the 12-Month Price Target for Tesla Stock?
On Wall Street, analysts have maintained a neutral stance on Tesla stock. According to TipRanks, TSLA stock has received a Hold consensus rating, with 16 Buys, 11 Holds, and 11 Sells assigned in the last three months. The average price target for Tesla shares is $307.75, suggesting a potential upside of 38.7% from the current level.
