Deutsche Bank has resumed its coverage of the U.S. auto industry, naming Tesla its top pick in the process. Analyst Edison Yu reinstated Tesla with a buy recommendation and a $295 price target, which represents a 36% upside from Monday’s closing price. Though shares are down nearly 10% in 2024, they’ve outperformed the broader market with gains of more than 9% in the quarter so far. TSLA .SPX Year-to-date mountain Tesla vs S&P 500 in 2024 Yu said Tesla is more of a technology company that “deserves its own valuation as it seeks to reshape multiple industries” than a traditional automaker. “Tesla is in a league of its own and represents the secular leader we are most confident in,” Yu wrote in a research note on Monday. “Longer term, Tesla is an emerging leader in self-driving (robo-taxis) and humanoid robots (Optimus), and represents some of the most clear and profitable applications of end-to-end AI.” Tesla announced last week that it would launch fully self-driving services in Europe and China next year. In June, CEO Elon Musk claimed that Optimus Robots could one day make Tesla a $25 trillion company. The company’s energy storage business offers another promising growth opportunity, according to Yu, who forecasts net sales of $13 billion. “While vehicle deliveries/margins are certainly soft in the short term, we view this as a temporary period ahead of scheduled new models/refreshes,” Yu said. The company already has strong brand recognition around the world and is already the preeminent battery electric vehicle manufacturer, the analyst added.
Deutsche Bank names Tesla its top pick, says the company is in a “league of its own”
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