In a report released today, Chris McNally from Evercore ISI maintained a Hold rating on Tesla, with a price target of $300.00.
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Forget margin or options. Here's how the pros trade TSLAChris McNally has given his Hold rating due to a combination of factors stemming from Tesla’s latest quarter and its forward investment profile. While Tesla delivered an earnings per share result that exceeded expectations, driven largely by a sharp improvement in core automotive gross margins and solid free cash flow in Q4, McNally views the sustainability of these margins as uncertain, particularly given management’s comments that the shift toward FSD subscriptions could pressure automotive profitability in the near term. He also sees near‑term earnings risk, especially in Q1, where softer demand across major regions and seasonally weak sales in China could weigh on deliveries and industrial EPS versus consensus. In addition, although Tesla is progressing on autonomous driving initiatives and robotaxi testing in multiple U.S. cities, the timeline and commercial payoff of these efforts remain unclear, keeping some of the upside in the “call option” category rather than in the base case.
At the same time, McNally highlights that Tesla is entering a heavy investment phase that tempers the free cash flow outlook despite a strong balance sheet. Management’s guidance for 2026 capital expenditures to exceed $20 billion—roughly double prior expectations—implies Tesla will likely burn cash in that year as it ramps six factories, scales Optimus, and builds out compute and internal chip capabilities. This aggressive spending, together with the planned discontinuation of the S/X models to repurpose capacity toward Optimus and autonomous programs, reinforces a long‑duration growth story but also elevates execution and capital allocation risk. Balancing these positives and risks, McNally’s $300 price target and Hold rating reflect a view that the shares are fairly valued at current levels, with upside from autonomy and robotics offset by margin uncertainty and upcoming capex‑driven FCF pressure.
According to TipRanks, McNally is a 4-star analyst with an average return of 6.3% and a 60.71% success rate. McNally covers the Consumer Cyclical sector, focusing on stocks such as Magna International, Rivian Automotive, and Lithia Motors.
In another report released today, TipRanks – OpenAI also downgraded the stock to a Hold with a $459.00 price target.