Summary: TD Cowen raised its target price for Tesla to $519.00 from $509.00 while keeping a Buy rating after the company reported fourth-quarter results that included a margin beat and positive updates on its RoboTaxi efforts. Tesla shares, trading at $424.25, remain well below that target, and analysts’ price expectations vary substantially.
In its note, TD Cowen highlighted a stronger-than-expected margin performance in the fourth quarter and what it described as positive developments on RoboTaxi. The firm sees those outcomes as laying groundwork for improved investor sentiment as Tesla progresses through a sequence of potential autonomous vehicle and robotics catalysts.
The research house drew attention to several near-term and mid-term catalysts it believes could drive sentiment: Cybercab, expansion of RoboTaxi operations, advancement of Full Self-Driving (FSD) software, and development of the Optimus V3 humanoid robot. TD Cowen characterized the current market backdrop as one of "generally skeptical sentiment," and suggested the company’s recent results could help shift that view.
TD Cowen’s analysis includes an operating cost estimate for Cybercab of roughly $0.30 per mile. Based on that figure, the firm argued Tesla could expand RoboTaxi activity into less-penetrated rideshare markets. TD Cowen estimated that achieving about 5% penetration in lower-density Metropolitan Statistical Areas alone could equate to approximately $100 billion in revenue, underlining the scale the firm attributes to the RoboTaxi opportunity.
On vehicle demand, TD Cowen identified autonomous vehicle adoption as an important potential catalyst for lifting demand this year, reinforcing the firm’s constructive view on Tesla’s risk/reward profile.
Despite the positive note on margins, Tesla’s reported gross profit margin remains relatively low at 17.01%. The company’s balance sheet position was noted as financially stable, with more cash than debt.
Market valuation remains elevated. The note cited Tesla’s market capitalization at $1.42 trillion and a price-to-earnings ratio of 299.72, underscoring the premium valuation investors are assigning to the company amid high growth expectations.
Brokerage views beyond TD Cowen remain mixed. Piper Sandler kept an Overweight rating and a $500 price target while highlighting plans to repurpose manufacturing capacity toward humanoid robots. UBS increased its price target to $352 but left its rating at Sell, pointing to Tesla’s plans to significantly raise capital expenditures to support its AI initiatives; UBS says Tesla intends to double capex to $20 billion by 2026 and expects that increase will produce a sizable cash burn.
Canaccord Genuity adjusted its target to $520 from $551 while maintaining a Buy rating and updating its model to reflect Tesla’s AI strategy. Needham reiterated a Hold rating, noting disciplined execution in the automotive business alongside progress in AI work. Oppenheimer kept a Perform rating and acknowledged Tesla’s investments in a vertically integrated supply chain in support of its AI pivot.
The range of analyst price targets remains wide. TD Cowen’s note referenced InvestingPro data showing broker targets span roughly from $130 to $600, a spread that reflects divergent views on timing, execution, and the pace of revenue generation from autonomous and robotics initiatives.
Key points
- TD Cowen raised its Tesla target to $519 from $509 and retained a Buy rating following a Q4 margin beat and updates on RoboTaxi progress.
- The firm highlighted Cybercab, RoboTaxi expansion, FSD progress, and Optimus V3 development as primary catalysts, estimating Cybercab cost at about $0.30 per mile and suggesting ~5% penetration in less dense MSAs could generate ~ $100 billion in revenue.
- Brokerage opinions are mixed: Piper Sandler and Canaccord are constructive, UBS raised its target but kept a Sell rating citing higher capex and potential cash burn, while Needham and Oppenheimer maintain more neutral stances.
Risks and uncertainties
- Skeptical market sentiment - TD Cowen points to generally skeptical investor sentiment that could limit near-term upside despite operational beats; this affects equity market perception of the company.
- Elevated valuation - At a market cap of $1.42 trillion and a P/E of 299.72, Tesla trades at a premium that presumes significant future growth; if catalysts do not materialize as expected, valuation compression is a risk for equity investors.
- Capital expenditure and cash burn - UBS flagged Tesla’s plan to double capex to $20 billion by 2026, which that firm expects will lead to notable cash burn, presenting financing and liquidity considerations.
Conclusion
TD Cowen’s incremental raise to a $519 price target reflects the firm’s view that a margin beat and positive RoboTaxi updates create a constructive backdrop for Tesla as it pursues autonomous vehicle and robotics ambitions. The stock is trading well below that target, and analyst estimates remain highly dispersed. Investors will be watching execution on RoboTaxi, FSD, Optimus development, and the company’s capital allocation choices as signals that could validate or challenge the more optimistic price targets.