Is Tesla stock a buy now? It is facing the “next wave of growth”

Wall Street analysts expressed mostly positive reviews, with several maintaining their buy ratings on Tesla stock, although not all were convinced.

Early Thursday, the morning after the earnings report, Bank of America reiterated its Buy rating and raised its price target to $265 from $255. By Friday's close, shares had already surpassed that higher forecast, closing up 3.3% at $269.19 after rising 22% in the previous session.

Still, third-quarter earnings were so strong that BofA also raised its full-year 2024, 2025 and 2026 earnings forecasts. Analysts also highlighted the optimistic comments on the earnings release, such as 20-30% production growth next year (likely supported by a new EV model), prospects for the autonomous Cybercab, improvements in the Full Self Driving feature, smaller ones 4680 Battery Cost and Upside Potential for Selling Regulatory Credits.

“The bottom line is that Tesla is preparing for the next wave of growth,” BofA wrote.

So is Tesla stock a buy now?

Summarizing its investment thesis, the bank's analysts said the company is a pioneer in electric vehicles and can thrive as demand increases over time, while its self-funding status and access to cheap capital should ensure more growth.

“TSLA has reinvigorated the growth narrative with both commentary and results that act as a near-term catalyst for the stock, such as the Robotaxi event in August, new product launches in early 2025 and the possible licensing of FSD,” they added added. “That’s why we recommend buying the stock.”

At Morgan Stanley, analysts maintained their “Top Pick” rating on Tesla stock and supported their $310 price target, focusing on the company's forecast for 20-30% volume growth.

Similarly, Wedbush reiterated an outperform rating on Tesla stock and a $300 price target, while analyst Dan Ives also pointed to growth guidance and wider margins.

But JPMorgan analysts rated Tesla shares underweight and set a price target of $135, implying a downside potential of nearly 50%.

The bank warned that some catalysts for strong earnings in the third quarter, such as the sale of regulatory loans to companies that do not meet emissions requirements, were unsustainable in the longer term.

“As other automakers expand their electric offerings, they should be able to generate their own credits over time, thereby negating and ultimately eliminating the flow of payments from competitors to Tesla,” it said.