Roth MKM upgraded Tesla (TSLA, Financials) to a Buy rating from Neutral on Monday, citing increased demand potential linked to Elon Musk's perceived alignment with former President Donald Trump.
Increasing its price target for Tesla to $380, the upgraded price represents a 10% increase from the premarket price of $352.31.
Musk's "authentic support" for Trump, according to Roth MKM, might increase Tesla's customer base among conservative voters, hence improving the demand trajectory and supporting management's direction for 20%-30% delivery growth in 2025. The company said that this development lends legitimacy to Tesla's projected expansion.
The firm also underlined a good regulatory environment for Tesla's CyberTaxi concept. According to Roth MKM, the intentions of the Trump transition team to terminate the $7,500 electric car tax credit might indirectly help Tesla as other original equipment manufacturers scale down their electric vehicle aspirations.
“Enthusiasm for Tesla among conservative voters, comprising a mostly fresh buying pool, should also lift the demand trajectory,” Roth MKM stated.
With the brokerage comparing its development versus traditional alternatives, Tesla's robots program was highlighted as a near-term value driver. The business believes that continuous artificial intelligence and autonomous driving technology investments by Tesla will help to define its long-term value.
Separately, Wedbush analyst Dan Ives noted Tesla's developments in artificial intelligence and autonomous driving and called them fundamental for a possible multi-trillion-dollar value.
